In May 2011, the RBS launched its first mobile banking app for iOS. During six months, it gained 1 million active users who transferred 1 billion pounds via the app. In the next few years, the majority of world banks released their apps. They provided a handy way to make purchases and track spendings.
Now, almost every bank has a mobile app. It is a must-have for the generation raised on gadgets. People want to manage their money in a fast and secure manner. For that, your app should grow and evolve. In this post, we will see how to keep pace with the latest trends in mobile banking. Also, we will name the basic features and challenges of app development.
Mobile Banking Trends
Partnering with fintech
The 3DS 2.0 protocol obliged all European banks to open their API to fintech firms. Now, they skip the long way to gain access to bank data and quickly fill app store shelves with fintech apps. This situation plays into the hands of banks too. They cooperate with fintech companies and increase their profits. For example, HSBC contracted with the fintech service Amount to release a digital lending platform. In 2021, we expect to see more and more such collaborations. According to PwC research, 47% of companies that are open to partnership prefer to work with fintech firms.
Rise of neobanks
Neobanks offer higher interest rates, lower commissions, and more quality service. They don’t have physical offices and provide online support only. There are two models of neobanks organization:
- obtain their own banking license
- work based on one of the existing banks
Now, the target audience of neobanks covers all sectors of the population. According to the Pureprofile survey, 20% of US Internet users between the ages of 18 to 91 have a neobank account. 57% of respondents said that digital banking is more helpful than office-based banks. 8.8 % are planning to close accounts in physical banks and move to neobanks.
Growing usage of AI
Chatbots and voice bots are part and parcel of a mobile banking application. They join the ranks of support managers and check daily issues. The bots answer simple questions, send news and promotions, and perform various operations at users’ request. In 2019, banks all over the world saved $209 million by using chatbots. This figure is expected to reach $7.3 billion in 2023.
Currently, North America is the leading region for the use of chatbots. In Europe and Asia, the AI consumption boom is expected after 2024.
Adoption of blockchain
Blockchain is a decentralized system with a higher security level. Its operations go safe and fast. Banks consider it a promising area because there is an off chance of hacking. The World Economic Forum predicts the popularity of hybrid blockchains in the financial sector. It also says that the public sector will experiment with smart contracts.
Many banks have already adopted blockchain. For example, American Express and Banco Santander use Ripple to simplify international transfers. According to PwC, 17% of financial institutions around the world already receive income from the use of blockchain technology.
Increased interest in voice banking
For busy people, a voice feature is like a magic wand. The user can check the balance, pay the bill, and transfer money without looking at the phone. PayPal, Capital One, and American Express have already taught their bots to provide financial service. Google Assistant, Siri, and Alexa serve customers just as well as human experts.
Mobile banking statistics show that the number of users who see the benefits of voice banking is growing every year. According to the Fiserv report, the figures reached 51% in July 2019. It is 4 percent more than the prior year.
More cardless withdrawals
Payment without a card is no longer news. In 2020, this trend will gain more followers. The majority of modern phones support a contactless payment function, such as Apple Pay or Google Pay. Together with the near-field communication (NFC) module, they enable plastic-free transactions.
However, you can withdraw money without a card, even if your smartphone does not have an NFC module. Some ATMs have a scanner for reading a QR code. You can take the code in the mobile banking app, bring it to the scanner, and withdraw cash.
Essential Features Of Mobile Banking
Account creation. It is vital to make the registration fast and clear. At each step, ask to perform only one action. Remember to add hints and tips. To make a reliable account protection system, use biometric identification, like a fingerprint, iris, voice, and so on.
Daily transactions. Think over all the functions of interest to the client, such as check accounts, manage balance, view transaction history. If you want to implement a unique solution, pay attention to the Dutch bank ABN AMRO. The user can draw up an individual savings plan, set goals, and schedule investments in their app.
Customer support. The best mobile banking app provides 24/7 support. You can organize it by developing smart bots and hiring skilled humans. The former will answer simple routine questions; the latter — solve more complex issues. Thus, you will save on salary and run high-quality service.
ATM and banking units location. The users may need to sign some papers or cash out money. Give them an easy way to find the nearby ATM and bank branch. If you want to delight users, think of VR. Using it, you can show the exact route to the destination.
Push notifications. It is a handy way to send reminders, alerts, and promos. You can notify a user about recent purchases or warn if a suspicious activity was detected. The most important thing is not to overdo it. Also, do not forget to let the user turn off notifications.
Security. Consumer Affair claims that 82% of clients would not switch the bank if their current bank provides a safe and stable app. Mobile banking app security is an essential feature to consider. You should protect sensitive data and minimize the risk of fraud.
Extra Features Of Mobile Banking
Spending statistics. Give users a regular reporting of their costs. It will help identify the most expensive areas and revise spendings. Be sure to display information using charts or graphs. With a visual illustration, the user evaluates the data at a glance.
Cashback. It is the first feature of your global loyalty program. By returning even a tiny amount from purchases, you grow customers’ trust. Think of creative ways to organize a cashback. For example, you can let users select the cashback categories each month or contract with large retailers and run a win-win partnership.
Special services. The future of mobile banking goes far beyond money management. In your app, you can set up a full range of services that are of interest to clients. Take a look at the Polish bank Zachodni WBK. Their users can shop, order a taxi, and pay for public transport right from the phone.
Apps for wearables. The Australian Bank of Melbourne is the first bank that implemented an app for a smartwatch. The users can see the balance and look for the nearest ATM on their wrist. Right now, the service is available for Apple Watch, but we expect a mobile banking app for Android too.
Money sharing. The Visa study shows that the social side of the app is crucial for young people. Their interest in the banking app increases if they can split an account or lend money. The NBD bank from the Arab Emirates has already taken this path. Through their application, you can together pay the bill in a restaurant, when everyone contributes their share in the total amount.
Mobile Banking Challenges
The development of mobile banking has several peculiarities. You will deal with the personal data, as well as have access to users’ finances. Given this, your application must be reliable and legal in the country where you work. Besides, it should be cost-effective for your company. Below, I have listed the main challenges that you are going to encounter.
Statista claims that 72,7% of people who do not use mobile banking are not sure about its safety. Mobile banking security issues include
- mobile malware
- insecure Wi-Fi networks
- device ID vulnerability
- financial fraud
To protect your app, use sophisticated data encryption, multi-factor authorization, and users’ alerts. Set sessions time and warn users not to store passwords on the same device with the app.
Mobile banking regulations differ depending on the region. For European banks, the essential document is PSD2; for the USA, the law varies from state to state; in the Asian market, you will have to study the target country’s legal rules. If you are unsure which papers to research, consult with the legal counsel, make sure to do it before the development starts.
Get ready to meet the steep demands of users. They might forgive minor failures to entertainment apps, but not to the banking service. If your app crashes continuously, you will lose not just the mobile users but also the bank’s customers. To prevent that from happening, allow enough time for the testing phase. Work out the maximum number of cases to make sure that the application is stable.
Last but not least is the challenge of costs and benefits. Improving the service is good, but you should not operate at a loss. We advise starting with the MVP. With time, you can add more features. Also, you can think of reducing costs with the help of the app. For example, you could cut the number of bank branches. Another idea is to replace human operators with chatbots for simple queries.
Mobile development is a promising area of banking. With the app, you can attract more customers, reduce costs, and increase profits. To make a competitive app, keep abreast of the latest trends in the digital world. Do not forget about security and legality. Discuss all the points with your team before starting development. Smart planning will help invent a sought-after product.
This article was originally published at Softensy.