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Card-block features benefit both banks and customers

Card management continues to be the focus for banks in our Mobile Banking Dashboard. The main feature? Allowing customers to block cards within their mobile banking apps.

Currently, 47% of the banks we monitor offer this feature – among our monitored ‘challenger banks’, the figure is significantly higher. However, it seems as though UK banks are lagging behind other markets – only one of the UK banks that we monitor allows customers to block and order a new card in their mobile banking app.

Permanent versus temporary card-block features

While nearly half of the banks that we monitor allow customers to block their cards within their banking apps, not all features are the same.

The simplest functionality permanently blocks the card. Nordea (SE) offers one such example; the customer can easily block the card within Nordea’s mobile banking app, instead of having to call up the bank in the middle of a possibly stressful situation.

A more advanced card-block feature is reversible, allowing the customer to unblock the card at a later time. The most recent examples come from CitiBank (US) and Moven (US).

 Moven's card-block feature

 Moven’s temporary block-card feature

In the case of the three banks just mentioned, cardholders will still have to call the bank to receive a replacement card – a process that could be seen as disruptive to the digital customer journey.

Danske Bank (SE) customers don’t have this issue, as they can order a new card through the app. In addition, card transactions can be enabled/disabled for different countries and regions – giving customers even more control over their cards.

Danske Bank has created a seamless user experience and an overall win-win scenario between themselves and their customers – saving time and ease of mind for the customer, whilst saving on costs for the bank.

Danske Bank's card-block feature - restrict use in specific countries

Danske Bank’s card-block feature: “I would like to use my card in; Sweden, Europe, North America, South America, Asia, Middle East, Africa, Oceania”

Security, convenience and cost reduction

In 2015, the European Central Bank reported an increase in card fraud of 8% between 2012 and 2013, totalling €1.44 billion worldwide. If customers were able to manage their cards within the mobile banking app, they could arguably block their cards more quickly than if they have to call up a service centre, if they suspect that it has gone missing or has been stolen. Seemingly, this is the logic that some providers have employed.

And that goes some way to explaining the fact that, since the beginning of the year, 8 banks that Mapa monitors have introduced a feature to block cards in their mobile banking app (although none of them were in the UK).

It’s not only the cost of card fraud that banks are trying to reduce. In conjunction with the launch of their temporary card-block feature in November 2014, Commonwealth Bank (AUS) reported that 60% of the 11.5 million credit cards that are reported lost or stolen in Australia every year have actually been misplaced or are recoverable. Introducing a temporary card-block feature would therefore offer substantial savings to banks who don’t have to replace cards unnecessarily.

Commonwealth Bank also found that there was an impact on Australian cardholders of reporting their credit card lost or stolen, with 4.6 million hours spent on updating card details for direct debit and regular payments. Clearly, being able to unblock their card would save customers’ time and offer a slicker customer experience – if they find the card again, they won’t have to order a new one. In addition, making the feature reversible offers the customer peace of mind whilst searching for the card.

When looking at the benefits, for both customers and banks, of these features – like a temporary card-block, or being able to disallow any online transactions – it is easy to see why banks have introduced this to their mobile banking proposition.

We have mentioned it several times before, but it bears repeating: banks should offer choice to the customer whenever possible. Not everyone wants or needs to carry out journeys in the same way. Introducing features to temporarily block their cards, in specified channels and areas, and to order replacement cards from the app gives the user an alternative to calling up the bank. Perhaps it is time for UK providers to get involved?

Would you like to know more about our Mobile Banking Dashboard? Please contact us now.

 

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