As retail banks compete for business in today’s fast-moving market, much of the focus has shifted to mobile banking channels and for good reason. It’s an increasingly preferred banking option—especially among the rising, “on-demand” Millennial generation—that offers real-time account visibility and access to financial services. Yet, in terms of offering a premium customer experience that helps drive increased revenue through mobile channels, there remains plenty of room to grow.
“Consumers have grown accustomed to the speedy, “one-click” pace of social media and retail apps, and they now expect it from their mobile banking apps”
The challenge for banks is relatively simple. Consumers have grown accustomed to the speedy, “one-click” pace of social media and retail apps, and they now expect it from their mobile banking apps. However, before they engage via mobile channels, they also want to know their personal and financial information is secure and protected.
But, strengthening security and requirements for things like Anti-Money Laundering and Know Your Customer can quickly add more questions to the transaction process. This can increase customer friction and degrade the customer experience instead of streamlining it. You know what might happen next—frustrated customers who abandon transactions. So, how can banks resolve this conflict in order to offer consumers a better mobile experience that helps drive increased revenue through mobile channels?
Here, I’ll answer that question by sharing key mobile banking trends we’re seeing at Equifax that retail banks can use to help create a more engaging customer experience that helps minimize friction, while throughout the discussion offering a peek at the latest technology innovations to consider in 2017.
Better Understand Consumers
We’re seeing immense effort dedicated toward better understanding the person behind the device. Is the customer who they who they say they are? Does their physical location make sense? What about the device they’re using, does it belong to them? Has that device been associated with prior fraudulent activity? Somehow banks must answer these questions and others in order to fully address evolving security, fraud and risk management issues without adding friction that slows down the mobile transaction.
In response, we’re seeing banks push harder to fully address risk and fraud while also asking the fewest number of questions possible. As long as the customer presents a few key personal identifiers, for example name, date of birth and Social Security number, you can often dramatically reduce the number of required questions from multiple screens down to a few fields. In fact, today’s mobile technology tools can automatically prefill many remaining fields by augmenting that baseline of personal data with information gathered across a wealth of traditional, alternative and third-party data sources ranging from credit data to account payment data for everyday bills like cell phones and cable. This helps empower banks to create a more comprehensive view of the consumer while also helping minimize friction and improving the customer experience.
What’s more, other critical questions around device authentication such as ownership of the device and its “reputation” for fraud, can also be seamlessly addressed in seconds using today’s advanced mobile technologies through opt-in consumer consent. Generally, device ownership can often be authenticated using third-party carrier account payment data that’s integrated into the account opening process.
The beauty is that the data sourcing, retrieval and analysis, the identity and device validation and more—can often be completed within seconds using the advanced technology available today. This is helping banks better meet enhanced consumer expectations for real-time, point-of-sale identity authentication, while also providing stronger data verification and fraud protection, since the additional layers of data further help to validate the authenticity of the data provided by the consumer.
Make Mobile Apps Work More Securely and Seamlessly with Each Other
Think about where your mobile app begins and ends. Can consumers who take the time to download your app experience a “start-to-finish” transaction? For instance, can they initiate account opening and quickly complete it in one login session? What about financing and account management options? Are they able to make a credit card payment or pay other bills from their available accounts? These are all big differentiators that can help attract customers like a magnet or send them running into the arms of your competitors.
What about a related consideration, the interoperability of your mobile app on multiple mobile operating systems? Is it available on one type of device and not on another, and if so, how much potential business are you sacrificing by not making it available across all operating systems?
In both cases, we’re seeing retail banks expand their ability to offer a more seamless mobile banking experience, which can sometimes require integration with one or more third-party applications. For this, they’re turning to next-gen identification and authentication tools that can help smoothly integrate with their existing data, technology and decision management systems. Services are now available that are easy to implement and scale, can be customized for design and user experience across multiple platforms and channels, and are accessible to APIs.
Technology Adoption Timelines are Shrinking, so Get Moving
The timeline differences between various groups—think: innovators, early adopters, etc.—for willingly embracing technology change can cause some technologies to thrive or fail. Across retail banking, we’re seeing technology adoption timelines shrinking, meaning more consumers are more quickly adapting to and regularly using new banking innovations and technologies.
Based on observations made while working with several Equifax banking customers, we’re seeing rapid evolvement with consumers adopting new retail banking technologies at scale in less than 12 months, and getting closer to nine months on average. In the past, it took multiple years before new technology was adopted. Remember remote check deposit, which took almost 5 years to be adopted at scale?
For retail banks, this means if new technologies are being released, you may no longer have years to adopt. As consumers of all ages—not just Millennials—become increasingly comfortable with the ease and convenience of today’s fast-moving technology, they can and will need to move quickly to use it, even if there is not a significant financial upside.
Tailored Mobile Offers Work Best with Consumers
Consumers naturally appreciate a more customized mobile experience, just as they appreciate a more tailored offer that’s focused on their lifestyle and circumstances. Knowing this, we’re seeing more retail banks integrate a multitude of data sources into their point-of-sale mobile transactions in order to build a much more complete view of the customer.
By pushing beyond the self-provided data entered by consumers at account opening (along with consumer consent), banks may acquire predictive insights about their estimated income, credit standing, how they pay their bills, whether they may own a small business and much more. This differentiated data is helping banks better understand a consumer’s lifestyle and financial trajectory and can be factored into automated confidence and risk scores that trigger supplemental offers based on the consumer’s unique profile. It may also be helping them expand their customer relationships and lifetime account values. Likewise, the use of alternative data is enabling them to make more confident, risk-averse offers to underbanked consumers who were previously unscoreable due to their lack of credit history.
As we speed into 2017, one thing is certain: mobile is playing an increasingly vital role in customer acquisition and onboarding for retail banks. By ensuring that your mobile banking interface integrates the latest technology innovations and differentiated data sources, you can help to dramatically improve the customer experience by easing common areas of transaction friction. In turn, consumers are more likely to reward you with their business and continued loyalty, which will help you drive increased potential revenue through your mobile and online channels.