Mobile technology has quickly obliterated the idea that banking is chained to a branch. Banking is now something you do on the go. Just look at the data: An average of 74,000 new users sign up for mobile banking each day, and the number of mobile banking users jumped 40% in a single year.
What’s even more startling is how fervent the demand for mobile has grown. In the last quarter of 2013 a total of 60 percent of users who switched banks said that mobile played an important or extremely important role in their decision.
What other innovation has this kind of leverage for acquiring users?
In addition, it’s important to note that most of those who switch are either Moneyhawks or millennials. According to Alix Partners, nearly 20 percent of millennials switched from their primary bank last year — again, largely because of mobile offerings.
A wave is coming, and financial institutions that aren’t prepared for it are bound to be swept away.
If a financial institution doesn’t appeal to Moneyhawks and millennials, how much longer will it survive?
There’s a reason that Tim Sloan, senior executive VP of Wells Fargo, recently reported in an earnings call that “mobile banking continued to be our fastest-growing channel with 12.5 million active mobile customers up 23 percent from a year ago.” These big banks know the importance of developing a robust mobile platform.
And yet mobile apps at the big banks are far from polished. To illustrate, in May 2014 Forrester Research analyzed the mobile apps of the five biggest U.S. banks and said that while these apps have been built on a solid foundation, they’re lacking in key areas. Specifically, Forrester said that digital banking teams “need to help customers with money management, engage them with contextually relevant information, and start generating sales leads with product offers and information.”
To put it succinctly, banking apps need:
Since the big banks are lacking in these key areas, there’s a huge opportunity for smaller players to work with third party providers and win market share. It’s not too late to be the institution that leads out on the digital front.
In sum, users are starting to expect excellence, not just competence, in their mobile offerings. All the charts above prove as much. People will switch for an excellent mobile app, and banks and credit unions that offer such an app will survive long into the digital age. That's what the wave of change is teaching us.
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