Financial news

Digital banking apps have become synonymous with managing personal, and business, finances. The banking sector has witnessed a significant shift that places power in the hands of the consumers. 

Here, Gaurav Mirral, chief executive officer and executive vice president of Mastercard company Ethoca, explores what customers truly want from their banking apps, and what the future holds in store for them.

In the decade and a half since their introduction, smartphones have become ubiquitous, and consumers have embraced the purchasing power provided through their advanced technology. A third of consumers use digital banking channels daily and 50 per cent would consider switching banks if they were not getting the services that they expect.

I’m old enough to remember when we didn’t have these options: if you wanted to check your bank balance then you needed to find an ATM or take your logbook to a high street branch. If you wanted to set up a standing order on Friday evening you’d be out of luck, instead, you’d have to wait until a branch opened on Monday morning.

The advantages of digital banking apps are, in some ways, obvious. They bring extra security, and they offer consumers a way to keep tabs on their own spending as well as ensure there is no suspicious activity happening on their account.

Given the substantial strides taken thus far, the question arises: what lies ahead for digital banking apps? What can banks offer their customers to not only pique their interest and engagement but also build trust between consumers and their financial service providers? In short, what do customers want out of their banking apps?

Evolving user expectations

Through our own research, we can see that consumers want richer merchant information, such as logos and easily recognisable business names. This means that if customers are unsure about whether they really made a transaction or not then the rich data, like logos and location data can help jog their memory. Consumers are also looking for newer features and capabilities in these apps, such as tools for managing or tracking subscriptions, shipping status, loyalty programs – and to manage spending limits.

With banking apps also comes the opportunity to make use of digital receipts too. The advantages of these are numerous. They are convenient, always accessible and they don’t suffer from the problems of thermal printed physical equivalents – they don’t fade in sunlight, get damaged in your wallet or take up precious space!

These are the key elements that build trust, and therefore loyalty, between the consumer and the brand It means customers will have an easier time managing their subscriptions and that they develop positive associations with the retailer in question.

This banking app revolution, as it is being described, is being taken a step further by its digital-first pioneers. There has been a rise in the number of online banks without a street presence. There are now 66 of these so-called ‘neobanks’ in the US and 23 in the UK – they cover 27 per cent and 23 per cent respectively of the banking population in these two countries. It is projected that there will be 28 million neobank customers by 2027.

Offering an enhanced user experience

With much innovation in the market, we know it’s our responsibility to create an ecosystem of trust between issuers and merchants – in so doing, enhancing the experience for consumers by providing the functionality that they need.

At Mastercard, this is something that we’ve always placed at the forefront of our strategy, expanding what is possible for consumers and retailers alike. With the banking app as a consistent touchpoint, merchant discounts and loyalty programs have a higher potential to reach increasingly engaged consumers with greater regularity and impact. As we’ve established people want to interact with the places they buy from within their banking app – and, if the opportunities are there, then consumers will act on them.

Introducing new Ethoca features within digital banking apps contributes to a seamless experience, reducing the necessity to toggle between multiple applications. The consumer experience can also be personalized without becoming obtrusive.

For example, if an app notices that a customer is making a lot of purchases from a particular vendor then it could highlight special offers and deals. This delivers more value, continually surprising and delighting customers above and beyond giving them the functionality that potentially saves them money and provides a great user experience.

As well as the obvious consumer benefits, adding these capabilities creates value for merchants and issuers – by driving top-of-wallet behaviour for consumers and fewer disputes – and increasing consumer lifetime value.

The future of digital banking apps

I believe that banking apps are likely to become ‘super apps’, with an ecosystem of features that allow for a huge range of financial interactions and services that will drive huge value for brands and consumers alike.
For now, satisfying consumer expectations remains essential for preserving engagement and trust with loyal users.

Achieving this vision demands concerted efforts among banks, brands, and payment players to craft a digital banking ecosystem that genuinely caters to the evolving requirements of consumers. As we persevere in our quest to innovate and deliver greater lifetime value, the digital banking experience will become more accessible and even more enjoyable than ever before.

To learn more, visit: https://www.ethoca.com/