48% of smartphone users regularly use online banking services. The same users' number make purchases in online stores. Other popular online operations include payment for services (such as ordering taxi rides or food delivery) and personal money transfers.
In general, online banking has become an integral part of our life. People of different ages have appreciated its usefulness and convenience. Therefore, it is not surprising that online finance is continually growing and getting updated with new features. In this article, we will look at the most popular digital banking trends and how you can apply them in your app. Also, we will see the differences between online banking and mobile banking and find out if it’s still relevant to develop web banking in the era of mobile apps.
Current Digital Banking Trends
The difficulties of 2020–2021 led to many changes in the processes of banks digitalization. On the one hand, they forced the banking system to switch to a remote work format and rebuild internal workflow; on the other, they offered easier access to banking services and expanded the online range of banking products.
In 2021, banks are operating in conditions of a pandemic and high-tech inventions. To meet the customers’ needs, they need to quickly adapt to industry demands and follow current and future trends in mobile banking. Next, we will review them in more detail.
Growth of online transactions
This trend is not new, but it has accelerated significantly due to the current remote mode of everything. People are increasingly paying for goods and services in eCommerce stores. Two-factor authorization and transaction confirmation in mobile banking make this process faster and more secure. So, people more often choose it over offline payments and trips to brick-and-mortar stores.
Besides, during remote times, many have tried stock trading. As a result, many brokerage accounts were opened through banking apps. In addition, the number of mortgage and consumer loans issued online also significantly increased.
Simplified access to banking products
Minimum time and effort are the top priority things for modern customers. With this in mind, banks are trying to simplify access to banking products and make the user experience as pleasant and seamless as possible.
Today, bank-client interaction is a universal communication environment. It allows users to interact with banking services and operations through any online mechanism, from a voice call to instant messengers. Besides, current digital banking trends make banks look towards innovation. That is why many institutions implement AI tools, speech recognition systems, and biometric authorization.
The remote format of work dictates the need to reduce paper circulation or abandon it completely. Most modern banks allow customers to open accounts, pay taxes, and carry out other financial transactions without leaving online banking. In this regard, digital electronic signatures, security tools, and biometrics systems are actively developing.
This situation shapes future trends in mobile banking, forcing financial institutions to pay more attention to cybersecurity and customer data protection.
AI and ML usage
Artificial intelligence and machine learning are no longer something new. They have penetrated various spheres of our life, and the financial sector is no exception. In 2021 and beyond, banks will actively master smart technologies and embed them into different levels of the banking system. Today, the most common AI and ML cases come from various banking activities and are as follows:
- marketing and sales: lead scoring, cross-selling, personal offers, targeting
- customer service: chatbots, voice bots, checking client documents
- back-office processes: risk management, intelligent processing of documentation
The expansion of information technologies and various gadgets led to the accumulation of big data within the banking system. In 2021, banks build smarter ways to use it through logical data structuring and extracting meaningful pieces of information. All this leads to establishing stronger customer relations through personalized marketing, individual offers, and seamless communication.
For example, banks can draw up typic user behavior patterns based on the data from online banking, mobile app, ATMs, call centers, etc. This helps them differentiate banking offerings to meet every user’s wants and needs and set up an efficient marketing campaign.
A personalized approach to a client is nothing new. To increase user loyalty, banks differentiate products depending on the customer profile: profession, income level, credit history, etc.
Future trends in mobile banking intend to make such personalization more advanced and innovative. For example, using ML algorithms, banks can analyze a given customer rather than a persona which acts as a generalized character. This way, banks can offer users exactly what they need, increasing their interest and strengthening brand confidence.
Rise of neobanks
Under global digitalization, when most banking transactions can go online, the brick-and-mortar system becomes less relevant. Many customers never visit physical bank branches, so their necessity gets highly questionable.
In such conditions, the rise of neobanks, completely digital organizations with no physical branches, is quite reasonable. Due to significant savings in renting premises and associated costs, they can offer more favorable terms to customers than traditional banking institutions.
Vivid design of banking apps
Financial apps are used by people of all ages, including students and pupils. Therefore, a boring and severe design is not something they will pay attention to. For modern banking apps, it is crucial to deliver superb usability and catchy visual elements. More often, they come up with pieces of gamification and cartoon-like characters. This approach introduces serious banking apps in different lights delivering fresh UX and impressions to its customers.
Open banking strengthening
Open banking is a way to use open APIs in the financial sector. It enables developers to make various financial services using data and tools provides by big traditional banks. The concept of open banking was introduced several years ago. It has brought benefits to many organizations during this time, both on the receiving and selling sides.
Thus, open banking has pushed the rapid growth of financial startups and the development of financial apps. You may have noticed there are many budgeting apps, investment apps, credit score services, and other solutions on the market now. In turn, banks have received an additional source of income by renting out their APIs. As for the customers, they benefit from the wide range of services and can easily switch between different apps.
Cloud services are becoming a hot trend in digital banking innovation. They allow you to launch financial services faster and quickly scale them on-demand. Organizations save time and money by working in the cloud because they don’t have to deploy IT infrastructure on-premise. Cloud providers supply developers with all the necessary tools, including server space, AI/ML technologies, backup/restore functions, etc. This makes development faster and more efficient. And when the business starts to grow, you can easily adapt to its changing needs by purchasing the necessary resources.
Do You Still Need Web Banking In the Era of Mobile Apps?
Today, all online services, including online banking, are trying to come up with a mobile solution and provide the customers with on-the-go UX. With the rapid growth of mobile apps, this intent is reasonable. Moreover, it puts the necessity to develop web banking under the question. The business owners might be confused if they need to invest in web development in the mobile everything world.
To clear up doubts, let’s turn to the facts. According to Deloitte research, 94% of mobile banking users login to the web app to conduct specific operations. Besides, 38% of respondents prefer the desktop app version to implement P2P money transfer. When it comes to international transfers, most users (56%) opt for web-based platforms rather than mobile banking (38%).
Considering the above, modern banks should equally develop both web and mobile lines of their online presence in the market. Each application would cover the customers’ specific needs, and the lack of any of them may lead to user dissatisfaction and customer churn.
At Softensy, we specialize in fintech development. We work with enterprise-level clients who entrust us with implementing their banking services and other high-tech solutions. If you need expert help for launching a web or mobile project, don’t hesitate to get in touch. Our managers will advise on the best solution no matter at what development stage your project currently is.
This article was originally published at Softensy.