By Marilyn Kennedy MeliaDid someone say tech is impersonal? Consider mobile banking closely, and the stereotype doesn’t hold up:
A customer grants prime real estate on his mobile screen to his bank’s app. He views—consciously or unconsciously—the bank’s logo dozens of time daily. Several times weekly, he performs routine banking tasks through the app, saving his precious time. He may even silently praise his bank for his burgeoning savings balance, thanks to an algorithm that finds and scrapes spare dollars into the account.
The virtual banks taking up residence in consumers’ pockets mirror what the physical bank does, sometimes even one step better.
Mobile banking is still a relatively young phenomenon. It’s evolving with technology and responding to ongoing insights on what customers value. Here, bankers and experts share some of the lessons learned along the way.
Mobile matters, but doesn’t replace branch banking.
Late last year, a survey conducted for the American Bankers Association by Morning Consult found 70 percent of consumers use a mobile device to manage their account at least once a month, and 46 percent do so more than three times monthly.
Still, that leaves a significant segment of non-users.
And, a JD Power survey finds that customers who use both branches and digital banking are more satisfied with their banking relationship than those who strictly deal with physical or digital channels.
To introduce customers to mobile, banks use all the traditional marketing mediums, like email blasts, in-branch signage and envelope stuffers, say researchers Chandri Ohri, Rob Levy and Hannah Kramer of the Financial Health Network. Some banks are also experimenting with cash-back and other incentives for app users.
However, Peter Wannemacher, principal analyst at Forrester, points out, “The most important factor in driving adoption of mobile banking is knowledge and advocacy from customer-facing employees.”
Chris King, director of marketing for Sheffield, Ala.-based Bank Independent agrees. “We have had great adoption [of the app]among our team members,” he says. “That helps with customer questions.” Bank Independent keeps educating its staff as well, through internal newsletters.
Branch personnel need to gently nudge the uninitiated.
The challenge is to introduce branch customers to mobile without implying they are no longer welcome at a physical office, notes Doug Smith, director of consumer digital banking for Fifth Third Bank.
Part of the Fifth Third staff training focuses on how to pick up cues from customer conversations to introduce mobile. Gentle hints might use phrases like: “I just want to let you know that you can also do this at home—not that we don’t want to see you—but if you don’t feel like going out in this weather…”
Manuel Moure, head of retail customer solutions development for BBVA’s U.S. operations, agrees. “Employees are among the best ambassadors we have for the mobile app, and this is especially true of the branch team members, as they have day-to-day contact with clients.”
Within its app, BBVA offers a tutorial-style demo, Moure explains. When BBVA team members discuss mobile with customers, BBVA team members are trained to help a customer download the app, and then launch the demo. In the process, the employee inputs his/her employee identification number, allowing BBVA to track all the activity that the employee and the customer perform together.
This data allows BBVA to identify trends such as post-demonstration adoption rates. It also informs what new staff training may be needed.
Meanwhile, north of the border, the Royal Bank of Canada has come up with an innovative solution to an old problem. Bryan Herskovits, RBC’s director of digital activation, says that a few years ago, “we realized that a lot of our employees were not using the app [for their personal banking].”
In response, RBC recruited individuals from its front-line staff to help strengthen their peers’ know-how.
Counter-intuitively, these recruits weren’t necessarily tech-savvy, but had good “soft skills”—meaning they were good communicators. The digital know-how can be taught, Herskovits notes, but not the ability to support their peers to adopt a digital focus.
To educate ambassadors—and all staffers—RBC relies heavily on a gamification platform developed in partnership with a third party. “It’s addictive,” Herskovits says. “When we re-designed our app this past winter, 75 percent of our employees completed all their learning in 30 days.” RBC also devotes one week each month to employee education on digital functions.
Customers love budgeting tools and autopilot savings.
A recent Forrester report emphasizes that for a decade, banks have “focused more on transactional features than service features.” But the report adds that “this has started to change.”
At the forefront of app enhancements are financial health tools, part of a larger emerging focus among financial institutions to improve customers’ overall financial security. Indeed, a study by the Financial Health Network finds that 40 percent of senior bank executives said they are currently offering digital financial health management or budgeting tools that provide customers with real-time advice. Another 22 percent plan to offer the same in the next 12 months.
Along with this burgeoning interest, behavioral economists are learning what the best budgeting tools really are, notes Jamie Foehl, senior behavioral researcher at Duke University’s Center for Advanced Hindsight.
Consumers value an app that can categorize their spending and send alerts reminding them to put dollars in savings, Foehl explains. But for many, a better solution is an app powered by artificial intelligence that knows when small amounts of money in checking can be transferred into savings. “It’s money that won’t be missed,” she says.
Foehl acknowledges that regulatory challenges and the risk of overdrafts can inhibit bank adoption of these auto-save mechanisms. But AI advances are solving many potential issues.
For example, Fifth Third purchased the Dobot app from a third-party firm last year and launched it for bank customers—as well as non-customers. This unusual approach was taken in part, Smith says, because “we were impressed [with the app]and because we could bring it out quickly.” He adds, “We wanted to bring it to everyone, not just Fifth Third customers.”
Dobot sweeps small amounts from customer accounts into a virtual savings account—out of sight to be out of mind, Smith says. But users can call up their balance and access their savings anytime they wish. Since introducing Dobot, 85 percent of the app downloads have been to Fifth Third customers.
A similar capability called NOMI Find and Save was embedded into the RBC customer app in 2017. The tool uses predictive technology to find money in a client’s cash flow—and automatically moves it into savings. Customers can use it to establish separate savings vehicles, like college savings or a down payment. Branch employees can suggest using the feature within the RBC mobile app when a customer expresses the need to save for a particular purpose.
Instead of replacing employee-customer interactions, explains Herskovits, the app deepens those communications.
Marilyn Kennedy Melia is a banking and personal finance writer based in Chicago. Email: [email protected].