With the ongoing Covid-19 pandemic forcing businesses to adapt to survive, the global transition to digital services has boomed. The financial services sector has particularly seen a change, with digital and mobile banking adoption increasing exponentially.
Frans Labuschagne is the UK & Ireland manager at Entersekt, a provider of mobile-based authentication and app security software to protect online transactions. Fran is an accomplished enterprise software executive with over 15 years of experience in launching and maturing operations. Here, Frans discusses the rise of mobile banking during the Covid-19 pandemic, and the importance of financial mobile applications.
The Covid-19 pandemic has been a game-changer for businesses across the world, with many having to adapt the way they operate in order to survive. They’ve been forced to implement remote working at scale to keep their staff safe and rethink how they can still meet their customers’ needs without any physical interaction.
To meet these operational adaptations, organisations around the world have been rushing to digitally transform their services. And with new data showing that there has been a 70% increase in smartphone and mobile use since the pandemic began, it’s never been more vital to create digital platforms for mobile users.
One industry that has always been ahead of the curve when it comes to digital transformation is financial services, and when the world went into Covid-19 lockdown, digital banking services saw unprecedented adoption. According to the Wall Street Journal, 45% of customers now use their mobile banking application more frequently for standard banking activities, like depositing checks, rather than going to a branch or using an ATM.
Mobile adoption within financial services
Financial organisations are used to seeing increasing numbers of Generation Z customers (those born after 1996) using mobile banking, but the pandemic also spurred a drive in digital banking from older generations who have traditionally avoided their bank’s digital offerings, preferring to do their banking in branches. The reasons for this reluctance have long been attributed to fear, mistrust, a perceived lack of their own technical ability or a preference to speak to an actual person. Whether these reasons are valid or not, the events of the past ten months have forced older generations to change their ways. Financial institutions now need to ensure their mobile applications cater to the needs of all their customers – the tech-savvy and tech-novice.
A new report from mobile measurement organisation Adjust highlighted just how much growth there has been in the use of mobile payment applications over the last year. It looked at the growth of install and session rates for fintech applications over the first half of 2020 in Brazil, the UK, Germany, Japan, Russia, Turkey, Ukraine and the United States, and compared the data to that from the first half of 2019. The report revealed there was a 26% increase in mobile banking and payment application sessions in 2020 compared to 2019. The study also revealed that users are spending significantly more time in payment applications than they were last year, with an increase of 49% between the first half of 2019 and the first half of 2020. Regardless of whether we attribute this increase solely to the pandemic, it does highlight how customer behaviour is changing and how important mobile applications are becoming when it comes to banking.
So, what should financial organisations consider when developing mobile banking applications that suit all ages?
Building an age-friendly mobile banking platform
When it comes to developing mobile applications, financial organisations must transfer trust – the foundation of any bank – from the physical world to the digital world. The platform should therefore provide a highly secure environment from which core banking, payments, card management and authentication are seamlessly connected.
Mobile banking applications must also be user-friendly, easy, efficient and fast. They should not over-complicate transactions and should not assume all their users are tech-savvy – this only confuses customers and results in mistakes being made or banks losing customer trust.
Security is, of course, one of the most important features of any mobile banking application and so it’s vital that it is implemented correctly. Even though the security features behind any application should not be obvious to its users, we can tell which banks are doing right because these are the ones that are launching new features and experiences that impress their customers and increase their loyalty to the bank.
Mobile banking in Covid-times
The pandemic has undoubtedly increased people’s dependence on technology and spurred an uptick in mobile banking adoption, and it seems that the trend is here to stay. Financial organisations should expect to see increasing numbers of their customers opting to bank online because of the convenience it offers. This is a huge window of opportunity for financial institutions to develop mobile applications that allow customers to carry out all their financial requirements without having to physically interact with the bank. However, it is important that banks build applications with their entire customer base in mind, particularly as mobile banking is increasing across all demographics. This means developing applications that are straight-forward and get the job done. There should be no compromise on security, but transactions should be as seamless as possible, without adding unnecessary steps, which only confuse customers and over-complicate transactions.
As smartphone usage continues to soar, mobile applications will play a huge part in the way people do their banking. Mobile applications also provide an ideal platform through which banks can communicate with their customers and increase customer satisfaction. Getting the fundamentals right is a sure way for banks to remain one step ahead of their competitors and increase customer loyalty.