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How Banking Apps Are Enhancing User Experience

  • by Jonathan Tarud
  • Posted May 1, 2017
  • USER EXPERIENCE

When it comes to app user experience, banks haven’t exactly been at the forefront of innovation.

Most of us have experienced the banking app that is clunky to use, leaves out key functions that you’d like or is plain ineffectual. The good news is that many banks are now taking the initiative to create a better strategy catering to the mobile market and going beyond the cursory “we should have a mobile app” perspective.

There are principles other app creators can learn from efforts to improve the user experience in banking apps, so we thought we’d take a dive in and check out what has been going on with banking apps, along with some of the best of app innovations.

What are some best practices of top banking apps? Get our quick guide here:

Banks often fail on user experience

This is probably not really news to anyone, but studies have shown that what we believe intuitively about banking apps is true among users. Adaptive Labs studied five top UK banks a couple of years ago and found that none rated much above mediocre.

“The report found that none of the banking apps on display scored more than 75% on either functionality (how many banking tasks people can do with the apps) or usability (how fast, easy and pleasant the app is to use and to understand). The lowest scoring app rated just 32% overall, breaking down into 43% for functionality and 25% usability.”

This is a poor showing, considering the same study also found that bank customers were much more likely to use their mobile phone for daily banking activities than to switch to a laptop or PC.

In a recent report, “The Nexus for Retail Banking Apps”, App Annie examined the US market and found that the entire customer experience of a retail bank is increasingly being defined by their mobile apps. Customers are actually choosing to remain with or leave a bank based on how well they deliver on mobile banking.

The 2016 Mobile Deposit Benchmark Report further enforces the view that mobile app experience needs to be at the forefront of customer strategy for banks. In fact, it will strongly factor into whether a financial institution is able to remain competitive in the retail banking space.

Further, the study found that most retail banking apps are not reaching their potential in terms of adoption of features by users. Only four out of ten users had used the mobile deposit feature, for example. A common reason for this and low adoption across other features was that the bank’s customer experience and related policies needed improvement.

Competition from new fintech

Another area where banks need to be sitting up and taking notice is that where they are failing with customer experience and mobile innovations, there are new, disruptive fintech services which are stepping in and becoming popular with users.

In App Annie’s “The Nexus for Retail Banking Apps” report, while the traditional retail banks have larger user bases, the new fintech providers are snapping up new users who want a better mobile experience. In the graph below, the top three fintech apps each have a larger user base than the fifth-largest retail banking app in the US.

app_annie

Source: App Annie

An important distinction that they found is that fintech apps are outperforming the ratings of top retail banking apps quite significantly. This may be attributed to the fact that most fintech services are mobile-first in nature and were designed to appeal to digital users.

Banks run the risk of being left behind if they don’t give priority to mobile solutions. This message is true across different markets, with users in Europe also indicating “adapt or else” in a separate App Annie report, “Retail Banking Apps in Europe.”  The rise of mobile has opened the door to fintech, creating new opportunities in spaces that traditionally would have been taken by the big banks.

User experience innovations

Ok, so we know that giving focus to excellent mobile user experiences is a vital strategy for retail banks going forward, but what have banks been doing in practice to live up to this?

First of all, let’s look at some apps which have scored well with user ratings. According to App Annie’s report  “The Nexus for Retail Banking Apps” relating to US banking apps, Citi Mobile was one that managed to significantly grow their user base. They achieved 55% growth between March and September of 2016, coinciding with a period in which they released new features. These included:

  • Automatic payments for credit cards.
  • Linking to outside accounts to pay off credit cards.
  • Credit card locking feature.
  • Viewing statements.
  • Credit ratings (FICO scores).
  • Saving or printing confirmation screens from payments

All of these are fairly basic banking functions, but it’s clear that a lot of user angst over banking apps has come from not having the ability to complete the basic functions that they need. This is probably the first area banks should look at before moving on to some more innovative ideas in mobile banking. After all, you’ve got to have the basics of service and user experience right.

Going beyond the basics, there are some great examples of how banks are providing innovative user experiences which meet the demand of the mobile generation. Here are a few:

  • Budgeting – Thinking in the broader sphere of financial management, it makes sense to offer services which complement those basic banking functions. The Spendlytics app by Santander is a great example of adding value to the user experience, allowing a budgeting function. Users can easily see card spend broken down into useful categories, how their spending behavior is trending and the details of their spending.

    User Experience
  • Customer rewards – Like other retail apps, banks can add an extra layer of customer appeal by including access to customer rewards in their apps. For example, Bank of America offers cash back rewards within their app for customers who select offers. Barclay’s bank offers their “Blue Rewards” program as part of their mobile app, which includes cash back offers and rewards for using bank services.
  • Apple pay – While not offered as such as part of a mobile app, it’s still part of the overall mobile experience of a bank. Bank of America has started offering cardless Apple Pay withdrawals at its ATMs and Wells Fargo recently announced that they will offer the same later in 2017.
  • Customer service – What if a mobile user still needs the touch of some personal customer service? Some apps are ramping up their user experience in this area too, with instant chat (USAA) and even video calls on offer from some banks. Icici Bank is one example that uses video calling and it offers this service 24 hours each day. It is however limited to customers who are enrolled in some of their more exclusive banking options.

The best banking apps follow some best practices – get some of these here:

User-centricity is key

When the first mobile banking apps started coming out just over a decade ago, they were more used as convenient tools to check a balance or monitor accounts. Now, with customers being increasingly accustomed to innovative mobile technologies, expectations are higher that banking apps will provide a more fully-rounded service.

Users are demanding better mobile experiences, so banks who don’t innovate run the risk of being left behind by new fintech apps which have been built specifically to cater to the digital economy.

Put your users at the center of your app experience. What is it they are asking for? The most successful banking apps are developed from listening to user demand and keeping up with new usage habits.

Koombea creates innovative app user experiences. Talk to us today about how we can help you.

 

Jonathan Tarud CEO & Founder

Interested in building cool stuff, fresh sushi, and shiny new gadgets. He likes to empower other founders to make their dream come true.

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