Should banks be worried about the supposed ‘death of the app’?

Within the the same week, the BBA has reported a significant rise in mobile banking app adoption, while ComScore has announced that purchases are now more likely to happen over a mobile browser than via an app. Commentators are predicting a ‘future without apps’ and eMarketer data suggests that app downloads are on the decrease (at least in Germany)… but Marketforce data shows that 72% of US consumers whose bank offers a mobile app have downloaded it (up 7% on 2014).

So are mobile apps dying or not?

For banks, probably not. Certainly, people are concerned with the data that an app requires; consumers certainly don’t want to have to download yet another app just to make a one-off purchase from an online shop. Will I delete photos to download an app I won’t use again? Unlikely. Choice overload is another issue. If I want to buy a particular product, where do I find the perfect app with which to do so, in an ever-more fragmented internet? As a brand, it’s tricky to make your app stand out in app stores: there are now up to 2.2m apps available for any given device. These problems don’t really apply to the banking sector, where the customer knows exactly which brand they are looking for, and is aiming to manage an account rather than perform a one-off activity.

But technology and responsive web design have advanced: apps are not the only way to serve information, take orders, and provide the best user experience on mobiles. This is actually true for banking as for any other service: many banks that Mapa monitors have kept their apps somewhat ‘functionality light’, offering more features on desktop and – by extension – within the mobile browser. In these cases, you can see why someone might opt not to download (and keep) their bank’s app.

How banking apps can replace the mobile browser

Stats in the press heralding the death of the app frequently reference the decline in downloads of new apps, rather than app usage, confirming the view that an app has to be extra special to warrant space on a consumer’s phone, not to mention their everlasting attention.

It could be argued that, for financial services, apps are a great place to deliver added benefits – features that are not available or possible on the website. App adoption in banking can only be promoted where banks integrate useful account management features with the hardware of a customer’s device. Mondo has one of the highest satisfaction ratings in Mapa’s Mobile App Benchmarking tool, and we believe this is in large part due to its level of integration with iPhone hardware (Mondo only has an iOS app).

For example, Mondo’s app makes use of the iPhone camera. Users can take a picture of receipts and ‘attach’ them to payments (for the purpose of expenses) and this is not possible on a browser. Mondo also use Force Touch in the pre and post-login areas of the app, as well as interactive push notifications and geolocation as part of the native device capabilities. As push notifications are related to apps, banks that eschew an app must rely on SMS or emails for the same instant impact.

Mondo Push Notification

Push notification from Mondo

Handy ‘widgets’ can also become extensions of a good mobile banking app – for example, to let consumers view their available balance without having to log in.

BNP Paribas

BNP Paribas (France) – Widget

Do customers want banking apps?

Security is a crucial element for many banking customers. Does an app feel more secure than a mobile browser? It may lie in how your bank authenticates your identity (a password is the same on an app and a browser, while a biometric login option may only be possible on the app). If a customer is used to desktop banking, the experience in a mobile browser will feel very similar – and thus perhaps more secure.

NatWest Touch ID Login

NatWest Touch ID Login

Apps also have a tendency to crash: the banking app that ranks lowest for ‘Security’ in our Mobile App Benchmarking tool is one that was subject to stability issues when features were updated earlier this year.

It’s all about engagement

Banking apps are not like shopping apps, because people check them daily (BBA stats suggest that there were 11m banking app logins a day during 2015, a massive 50% increase on 2014 numbers). As the speed of logging in and the ease of performing a wide range of banking tasks picks up, and personal financial management tools – using location services, push notifications and other hardware features – take off, consumers are unlikely to remove or ignore their (number one) banking app.

Mapa has many discussions with banks about how to make their apps useful to customers, and we now provide our Mobile App Benchmarking reports to financial institutions who want to see what thousands of real customers actually think about their apps.

(As a side note, the notion that apps in general are on the way out may be overstated. As Andy Favell in ClickZ points out, “Retail apps tend to be used as a retention tool. This means by their nature, they will have a smaller, more loyal, audience than mobile sites, which are more discoverable through mobile search and social media.” Sheer numbers of downloads, or even of purchases made through apps, don’t tell the full story. As Campaign suggests today, brands struggling to make a success of their app should consider how they integrate with bigger mobile platforms – perhaps consolidating their apps into chatbots.)

Somewhere in the middle

So maybe people are becoming less inclined to download a new app to their already overcrowded phone. And customers only engage regularly with a small fraction of the apps they *do* give home screen space to. The answer is not necessarily to dismiss apps altogether: hybrid apps are becoming popular, with new entrant ‘B’ opting for this approach. These are apps that include the best of both worlds – hardware integration, biometric technology, push notifications and rich functionality from the mobile web. Whatever route your bank takes, it’s crucial to offer consumers something they want to engage with and solves their problems in a slick and frictionless way.

PSD2 will bring a new set of challenges, with ‘aggregators’ and third parties potentially creating apps that use bank’s data to compete with their own app. Even more likely is that people will be able to add functions to their existing banking services thanks to more Open APIs – and, again, the banks creating the most helpful and seamless customer experience will win the day.

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