Mobile Banking Is On The Rise Due To Covid-19 — But Something’s Lacking From Most Bank Apps.
There isn’t any industry I’ve come across that hasn’t been affected by the pandemic in its day-to-day business functions and outputs. The banking industry, even as it remained open to the public as an essential business throughout the lockdown, experienced a permanent shift that ultimately may expedite customer adoption of digital, i.e. mobile, banking.
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Mobile banking has jumped in usage since the start of 2019, especially among young adults (a demographic which presents a greater customer lifetime value). Just over half of millennials and baby boomers bank from their smartphones — outperforming making a purchase from a smartphone, even — according to our latest study at Prosper Analytics.
To dive into this trend with a bit more color, I’ve tapped trusted professionals in the digital banking business at Moxtra, designers of white-labeled OneStop apps for all fields of high-touch business, including banking. Some of their customers include Citibank and Raiffeisen Bank International. I chatted with the Cupertino-based digital experience company’s co-founder and CTO, Stanley Huang, as well as Moxtra’s CBO, Leena Iyar, to get the scoop on what they explained is missing from a lot of banks’ current digital banking strategy: “a marketing and customer-centric mindset.”
Gary Drenik: Leena, has Moxtra seen an uptick in client requests for its OneStop Customer Portals to give bank customers a digital branch? Is the focus on accommodating the younger bankers or all ages? How are they accomplishing this?
Leena Iyar: There was already a migration toward mobile banking, but since the pandemic, there has been a major shift to virtual banking. Today, more banks are depending on fintech platforms to deliver high-touch, personalized experiences to clients on par with their traditional brick-and-mortar branches.
Moxtra has seen a significant increase in banks looking to deploy OneStop Customer Portals to give bank customers a digital branch right in their pocket. Raiffeisen Bank International (RBI), a leading international corporate and investment bank recently announced the launch of RaiConnect, a “virtual branch,” powered by Moxtra. Through RaiConnect, customers can connect with their relationship managers, collaborate on documents, have video meetings, screen share, and much more, on a digital platform encrypted with the highest security standards. The digital branch solution completely mirrors the in-person banking experience, with the added convenience of remote engagement.
Adoption of digital solutions has been faster for the younger generation, however, in light of the pandemic shutdown, older generations are increasingly adjusting to the benefits of convenience inherent in mobile banking.
Part of getting customers comfortable with the idea of virtual banking is in ensuring them that they can trust the safety of the app to house their sensitive account information. To effectively do this, it is paramount for banks to prioritize the highest security measures in their digital strategy to protect their customers from cybersecurity threats.
Prosper Banked in a Physical Location
Prosper Insights & Analytics
Drenik: Prosper found that in-store visits to banks and other financial institutions dropped by 33% since the start of 2020, showing clear effects of the pandemic on consumer habits. Stanley, what features did Moxtra build into its platform to address common pain points your developers observed in replicating the in-bank experience virtually?
Stanley Huang: Security is always top of mind. Ensuring the experience is secure while engaging your customers remotely is a first step. At Moxtra, we think of our platform as a “virtual branch,” conveniently available right in the customer’s pocket. Clients should be able to look at the platform and have a clear understanding of their financial portfolio.
To enable this, we’ve engineered a user-friendly and simplified interaction feature — allowing users to communicate quickly and directly with bank associates on-demand. With our OneStop App, clients can connect to their relationship management team around the clock. These client relationships are complex and typically involve several parties on both sides; therefore, responsive and transparent service is imperative. Organizations can offer their clients secure messaging, digital signature capabilities, and seamlessly track finances, transactions, and banking communications in real-time within their Moxtra powered platform with an auditable paper trail for compliance.
Data privacy and regulations are extremely important in the financial services sector. Managing a corporate banking relationship requires meticulous record-keeping and continued organizational systems. Through the management portal on Moxtra’s platform, a complicated network of moving parts is simplified by managing all internal and external interactions all in one digital space. By tailoring permissions for roles that mirror banking operations, a precise management system is created which provides a higher quality of service from the top down. Management can monitor the corporation portfolio and have full access to customer histories that persist through relationship management team transitions for a lasting relationship to be maintained between the customer and bank.
Prosper Banked with Mobile App
Prosper Insights & Analytics
Drenik: Leena, do you expect Covid-19 to expedite the adoption of mobile/online banking, which Prosper found has seen an over 16% increase in usage since this time in 2018? What else is necessary to lay that runway for greater usage by bank customers?
Iyar: The pandemic will absolutely expedite the adoption of mobile/online banking. While there had been a shift to mobile/digital banking before, now, it is necessary to have a digital strategy to survive. In order to deliver the same high-touch, personalized experiences, banks must look beyond generic websites and chatbots, and search for ways to provide an interactive hub over digital channels for clients to engage remotely.
To mirror the complicated network of moving parts within each organization, banks must develop a virtual banking ecosystem that organically delivers services to users, while simultaneously scaling as a bank-as-a-platform. Along with allowing clients to connect with their wealth management teams remotely, virtual banking platforms must ultimately act as digital branches. Each client should have the branded experience of the bank available through digital channels. Banks can deliver this service experience by offering a secure, branded, collaborative solution that merges in-person and digital experiences, through capabilities like secure messaging, digital signature, and a seamless tracking of finances, transactions, and banking communications in real-time.
There are benefits and capabilities provided by the mobile banking experience, which I believe will drive a shift in customer behavior away from the in-person banking option and the limitations of physical branches. For one, a digital platform can provide a high-touch experience that you cannot get in a physical bank. With the physical bank, you aren’t able to assign a relationship manager to every customer, however, that is possible with digital. In one of the banks that we worked with; they were able to assign 5,000 customers to just one relationship manager. That would be impossible to do in-person.
I see a shift from a bank customer market to a bank service market. The bank model has typically categorized customers and provided them with different levels of service based on the bank’s judgment. With a digital platform, banks are able to make their services available to all customers on-demand, and it’s then up to the customer to take advantage of those services as it fits their individual needs. This creates a persistent relationship between customer and bank, as each client profile and history stay within the organization for seamless ongoing relationships through any relationship management transition. With digital, banks will be able to optimize their resources, and thus, maximize the transaction potential of their customer base.
Drenik: Stanley, where do you see the future of mobile banking headed? Will it replace the need for the in-person experience, or supplement it for on-the-go customers?
Huang: Moving forward, I believe that the physical bank branch will transform from a transactional center to more of an experience center. There will be a shift where the digital branch will be used more frequently for service and transactions.
The key for banks is to integrate features focused on convenience and accessibility such as messaging, video chat, document collaboration, and more, to create an engaging solution for customers to use from anywhere, and at any time. As customers become more comfortable with virtual banking, and a drastic increase in the adoption of mobile and digital banking is seen, an opportunity is created for banks to provide a digital experience that exceeds the high-touch level of service customers would typically expect in-person. Leveraging a platform as an extension of a website can give banks an easy way to mirror the in-branch experience digitally, allowing clients to take their experience remotely.
Drenik: Leena, what do you mean by the need for banks to have a “marketing and customer-centric mindset” when serving their customers virtually? How does Moxtra aid in that process?
Iyar: Marketers are naturally focused on brand consciousness. They play a key role in overseeing the execution of how the brand is presented to customers as well as the messaging that is circulated. However, banks aren’t typically always self-aware of their brand identity when interacting with customers on a day-to-day basis. To be successful in the digital age, banks must take on this same marketing and customer-centric mindset when attempting to appeal to and retain customers. Especially during the early adoption period of digital banking, it’s important that bank employees educate and promote the benefits of this new approach to banking in order to gain confidence and trust from bankers and ultimately to earn their loyalty.
Moxtra allows each banks’ portal to provide a digital branch at each customer’s fingertips, under their respective brands. The technology powers the OneStop Customer Portal experience and stands as a digital branch, with continuous collaboration experiences — helping to retain and grow customers, manage distributed organization and lower costs for doing business. By leveraging Moxtra, banks can provide a fluid experience with top-notch security, audit trails, and compliance. A brand that is conveniently available over digital channels resonates with customers and drives loyalty. In today’s digital world, banks must take on this marketing mindset and meet customer expectations with a digital strategy.
Drenik: Thank you, Leena and Stanley, for sharing very valuable insights on the fast-growing mobile banking market. Retail Banking like other retail sectors is undergoing foundational behavioral changes accelerated by Covid-19 and your forecast for the future of physical bank branches is a response to these changes.
To stay ahead of the post-pandemic consumer, Prosper’s US Signals series of datasets include leading indicators and advanced predictive analytics covering forward looking consumer spending plans, behaviors and economic outlook:
- US Signals – Macro Economic and Consumer Purchase Intentions
- US Signals – Retail Economy and Consumer Spending Forecast
To read my previous Forbes articles on changing consumer behavior, predictive analytics, machine learning, data privacy and more, please click here.