Mobile Cross-Selling And Contextual Money Management Capabilities Underdeveloped At Largest Banks
Forrester’s US Mobile Banking Functionality Benchmark, evaluating offerings from the five largest retail banks, reveals that mobile cross selling is underutilized. “Too few banks use the context of a customer’s current product portfolio, recent life events, physical locations, past behavior or other factors to offer personalized marketing in their mobile apps,” writes Forrester. The report also reveals that contextual money management tools are largely lacking at the five largest retail banks. Wells Fargo is a notable exception, with the bank providing money management graphics within its mobile app. In analyzing Forrester’s research, Jim Marous also notes that “one of the biggest opportunities (and shortfalls) at the vast majority of financial institutions is not having the ability to open a new account entirely on a mobile device. A notable leader with mobile account opening noted by Forrester is Bank of America, where a customer can apply for multiple accounts directly from their mobile app.”
Tech Giants Pose Greater Threat To Banks Than Fintech Startups?
Writing for American Banker, Paul Schaus argues that tech giants such as Amazon and Google “pose a more formidable threat to banks than the thousands of startups populating the fintech market. The tech companies everyone has heard of can allocate huge resources to their financial services initiatives and they cannot be acquired.” Schaus notes that Pay with Amazon could lead consumers to trust Amazon as a payments provider “that goes with them wherever they shop.” While Google’s biggest entrance in financial services has been Android Pay, Schaus notes that their venture arm has invested in a variety of startups spanning lending, security, analytics and blockchain. “Once Google finds its best value proposition in financial services, it could cause the biggest shakeup in the industry of anyone in the market,” writes Schaus.
Big Banks Take Aim At PayPal
Jon Marino of CNBC reports that big banks are reclaiming market share in P2P payments through the ClearXchange platform, enabling consumers to send money instantaneously by mobile phone. ClearXchange’s digital cash transfer program was launched earlier this year and consists of Bank of America, JPMorgan Chase, US Bancorp, Wells Fargo, BB&T, PNC and Capital One. Bank of America CEO Brian Moynihan said the institution has processed $16 billion in mobile payments so far this year. Marino notes that the “institutional players' push to take business back from mobile competitors is only just beginning.”
Millennials Still Using Branches?
While 72% of millennials use mobile devices for banking, 63% also use bank branches — just slightly below 68% of Gen X and 69% of Boomers. Aaron Back of the Wall Street Journal reports on these findings from a Wells Fargo investor presentation, noting that millennials visit the branch six times a quarter versus seven times for their older cohorts. “This suggests bank branches will have a role to play for some time to come. That is especially the case for selling higher value-add services like personal loans and wealth management tools that millennials will tap in greater numbers as they get older,” writes Back.
Convenience, Rewards Programs Drive Credit Card Usage
92% of readers polled by the Wall Street Journal favor credit cards in paying for purchases, valuing their security (not being held liable for unauthorized charges) and expanding rewards programs. “Lenders have been boosting credit-card rewards in recent years, offering as much as 2% cash back on all purchases—compared with long-term standards of 1%—and up to 5% on certain categories,” report Annamaria Andriotis and Julia Haslanger. Only 19% of readers indicated that they were using mobile wallets like Apple Pay and checks remain in a downward spiral, with 62% of readers indicating that they rarely or never write them.