Qualities of an effective mobile banking app

The capability to electrify payments between smartphones and submit a check from your bedroom are now commonplace features in a bank’s mobile application.

Indeed, the primary elements in a mobile app, including informational tasks such as locating account information, money transfer activities and setting alerts, have remained consistent over the past few years, according to Peter Wannemacher, principal analyst in digital banking at consulting firm Forrester. 

“The features that have emerged, or are emerging, to meet customer expectations have changed,” said Wannemacher, such as card management or person-to-person payments.

A bank’s mobile app may not be the deciding factor in its relationship with customers. But the quality of the app does impact whether the customer will trust the financial institution and the depth of that relationship.

“The majority of bank customers have an additional account with another bank, particularly those under age 40,” said Jennifer White, senior director of banking and payments intelligence at J.D. Power. A better mobile app can influence a customer’s decision in favor of one bank over another. 

Maintaining a successful mobile app means keeping up with customer expectations for features and ensuring that basic components are visually appealing, self-explanatory, and easy to navigate. It also means staying informed about features that have become more critical in recent years.

White notes that customers seek ease of use for fundamental transactional needs, such as balance checking and the capacity to deposit a check, as well as personal finance management tools.

“You would expect that every bank today would excel in those areas,” said White. However, satisfaction with transactional experiences is decreasing overall, she said. There are various reasons for these declines, including changing consumer expectations and a greater understanding of digital functionality. 

“Banks are facing numerous digital challenges, including consolidating information and implementing advanced tools such as generative artificial intelligence,” said White. “However, it’s clear from the customer’s perspective that while addressing these significant needs, ensuring that core functionality is easy to use, intuitive, and seamless is essential.” 

While larger banks have focused on personal finance management tools, White found that smaller banks may have a few good features but do not meet the four types she believes are ideal: spend analysis, a savings function, a feature related to borrowing, and planning or budgeting tools.

Another area with inconsistent quality is alerts and notifications, said Susan Foulds, managing director of Keynova Group. She found that several banks she studied lack real-time balance alerts.

“You would expect that to be pretty fundamental,” she said.

Wannemacher has observed that peer-to-peer payments are more essential than they were five years ago, and that the granularity of transaction data in the mobile app has advanced. “It’s helpful to see the merchant’s location,” he said.

Another significant area is card management.

“Pre-pandemic, the best mobile banking apps offered some level of card management, but today’s apps provide the ability to instantly freeze or unfreeze, set transaction limits, activate cards, and report lost or stolen cards,” said Wannemacher. Foulds pointed out that banks still have room for improvement by offering more controls, such as the ability to toggle certain transaction types on or off, including e-commerce versus online purchases, recurring purchases, and different ATM activities. 

Account aggregation is another element that is gaining importance.

“In January 2024, will it be expected by the majority of bank customers? No, we don’t see that,” said Wannemacher. “But it’s rising so fast that banks should plan assuming aggregation is expected.”

Virtual assistants are also critical. The offerings from Bank of America and U.S. Bancorp in Minneapolis have some of the most advanced capabilities, according to Keynova Group’s third-quarter edition of its semiannual Mobile Banker Scorecard, which covers 17 large U.S. banks. Bank of America’s Erica and U.S. Bank’s Smart Assistant are the only two in the scorecard that offer two-way voice conversation, for instance.

J.D. Power has noted a connection between the use of virtual assistants and engagement with personal finance tools in the mobile app.

“Which comes first? I don’t know,” said White. “I just know that once you use a virtual assistant or personal finance management tool, you are more likely to be engaged with your bank on a regular basis and see value in that engagement.”

Virtual assistants can also fulfill another customer desire in their bank apps, even if it is not explicitly stated: the ability to search the app using conversational language or keywords. “Erica works quite well at helping you find stuff,” said Wannemacher. It doesn’t matter that Erica doesn’t function like a traditional search bar.

Wannemacher also categorizes some mobile app components as pleasant surprises for customers that will differentiate the app, even if users won’t be upset by their absence.

This includes autonomous functionality, which eases a customer’s decision-making on how much money to save; tools that enhance financial wellness, such as credit building and debt management; and shared finance.

For goal-related features, Foulds recommends they be prominently displayed in the app so they remain top of mind. The most advanced ones will automatically skip a transfer from checking to savings if a customer’s balance is too low.

Foulds also values user-facing security features, or visual elements that demonstrate the security strength of a customer’s account and provide tips to enhance security. For example, Wells Fargo has a security center that charts a user’s progress through its security checkup. Bank of America visualizes the different security levels customers can choose with a “security meter” and checklist. In one screen, users are prompted to review red flags that could signal a scam. They can also revoke consent to data sharing with third parties.

One seemingly simple aspect of the mobile app that may be overlooked is providing clear, accessible information on account rates and fees that don’t require a customer to search for them in a PDF. For example, in Capital One’s mobile app, a list of “ways to pay” includes a tag with the fees attached to cashier’s checks and money wires.

“Sometimes it’s those little things that make a difference,” Foulds said.

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