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Banks Need to Get with the Idea of Mobile-First Before its Too Late

The financial services sector has traditionally been slow to adapt to new technology trends.  Why should it?  In the past banks experienced low-churn rates partly because of the hassle of changing between providers was too much for consumers to countenance. 

That situation has of course changed with new regulation like PSD2 simplifying the ‘switch’ process so that consumers can now shop around for financial services relatively easily, in turn opening up the market to disruption.  Mobile first banks for example, that focus on the customer experience, are winning high-numbers of consumers away from their older rivals.

Digital experience firm, Episerver recently asked 1,000 consumers about how they like to access and use financial services. Here Joey Moore, head of product marketing at Episerver walks through some of the results and conclusions.

At the turn of the decade, mobile banking was still in its infancy, with many of the world’s largest banks still struggling to maintain and secure their internet banking platforms, let alone having to worry about mobile and responsive web apps. Now, as we march toward 2020, two-thirds of the UK population regularly manage their finances via a smartphone or tablet device.

Clearly, a lot has changed in the way consumers use technology in this time, but has it changed for the financial service industry? As with any highly regulated and security conscious sector, financial services cannot simply jump on technology trends overnight.

Where other industries can follow consumer demands and prioritise the customer experience (CX), banks and financial institutions must prioritise the security of their customers above all else – even if that means offering a less intuitive experience.

However, this doesn’t have to be an excuse to fall behind.

With the closure of over 2,900 high street branches in the last three years, and a new wave of digital disruptors entering the financial services market, it’s more important than ever that traditional financial service providers are perceived to be current for today’s customers.

In the face of this disruption, many leading financial institutions are working hard to improve their customer experiences to remain competitive, delivering a whole host of new services to account holders including pop-up or mobile banks, chatbots and increasingly mobile-friendly online service portals such as peer-to-peer payments.

These technologies represent a significant push in the right direction, but what is needed is a greater focus on the strategy behind the adoption of mobile-related initiatives. So just what are the areas where the financial service offering can be improved, and how can financial brands start to build out an effective mobile strategy?

Identify your audience

…consumers may grow weary of having an “app for everything” and will crave integration versus another download.

As with any good marketing strategy, the first step to developing better customer offerings and services is to understand your audience. According to Episerver’s Money on the Move Report, around half (49 per cent) of UK consumers manage their finances via a smartphone on a weekly basis and a third via a tablet.

Women also make more financial service transactions on their phones during the week — 57 per cent compared to 45 per cent of men. However, men are more likely to manage finance-related goods and services on a tablet than women (31 per cent versus 26 per cent).

Perhaps unsurprisingly, younger adults (those under 34) are by far the most likely to manage their finances on a mobile device, while consumers in their late 20s and early 30s are significantly more likely to use their phones to buy things like insurance, invest in stocks or purchase other financial services than older generations.

By understanding the needs and technology preferences of different groups, financial institutions can better design their mobile strategies and tailor their experiences. The best mobile marketing strategies are created around “ideal” consumer journeys, with tailored approaches to every stage in a consumer’s life, from their first ever bank account right through to withdrawing their pension. Only by understanding their audiences can brands create true customer lifetime value.

Service delivery

Once a business understands the needs of its audience, the next thing to consider is how to deliver services that fit those needs. For the majority of financial brands, this means mobile adoption.

Of the 20 biggest financial service providers in the UK, 19 now offer a fully responsive, mobile-optimised website. However, many still lack a mobile app with just 55 per cent offering an iPhone app and 40 per cent an app for iPads. The situation on Android devices is worse, with 50 per cent having a smartphone app and 40 percent having a tablet app for Android OS.

An app isn’t right for every institution, however, and the best thing for companies to do is consider why someone would use an app over a website. For example, if an app provides additional services like a messaging system, a portal to account details, or a personalised application system, a consumer might consider downloading and keeping it on their devices. Otherwise, a progressive web app or a responsive site may provide a more proficient solution.

Given that most financial service providers allow customers to accomplish necessary tasks via their website, it would make sense to invest there first. As app numbers hit an all-time high, consumers may grow weary of having an “app for everything” and will crave integration versus another download.

This is a key lesson for financial service providers: not everything needs an app. Start by thinking about the best possible experience for the customer and the right technology to provide it.

What’s next?

Given that the financial sector is not known for its risk-taking or experimentation when it comes to new technologies, it has proved imperative for banks and other financial institutions to get the basics right before moving on to the next big technology trends.

Now, with the vast majority of financial service providers running an effective mobile experience, they should consider what is next.

While wearable technology might be making a splash in the press, Episerver’s Money on the Move report revealed that less than a third (28 per cent) of marketers and CX professionals in the financial sector have plans to incorporate wearable technology into their approach.

As financial service providers plan their future strategies and increasingly embrace new consumer technologies, a seamless and CX-first mobile marketing approach is vital.

In the same way that mobile banking has driven greater consumer trust and willingness to make purchases on the go, the increase in financial apps being developed on smartwatches could cement the wearables trend. In fact, Episerver data shows that over half of voice-activated device owners (52 per cent) and smartwatch owners (54 per cent) make monthly retail purchases from these devices, which, like other cases, means financial organizations will need to model themselves after what is happening in the B2C retail sector.

There is an area, however, where the financial sector is leading on the adoption of a new technology rather than lagging behind. Whereas 40 per cent of marketers and CX professionals say they will incorporate chatbots into their marketing approach in two years, this figure jumps to 62 per cent for financial services.

As financial service providers plan their future strategies and increasingly embrace new consumer technologies, a seamless and CX-first mobile marketing approach is vital. By doing this, they can not only meet the needs of today’s consumers, but also provide the leading experiences needed to survive in the face of growing digital disruption.

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