The curious case of Online Banking

Are mobile apps making online banking obsolete? Statistics paint a different narrative.

Today, we live in an extremely connected-world; one in which smartphones are near-ubiquitous, and access-to-internet is considered an essential-service. Almost all digitally-active individuals of the banking-population seem to own and use a smartphone.

So, in this Mobile-First era, should banks persist with ‘Online Banking’ service? Who really uses it? Why not migrate every account and functionality to the mobile app? What justifies the continued investment in sustaining the Internet/Online Banking platform?

My curiosity drove me to objectively evaluate the trends, statistics and forces influencing the adoption across the Mobile and Online channels. As I delved deeper, a different narrative shaped up.

Over the years, Bank of America (BofA) has championed serval innovative digital-initiatives. In June 2018, BofA launched their chatbot – Erica, and made it available to all their mobile users. In about a years’ time, Erica has become one of the most popular and rapidly adopted chatbot in the Financial Institution (FI) ecosystem. Now theoretically, given the best in class mobile app and chatbot that BofA offers, all of their digi-savvy customers must have migrated entirely to mobile-apps, right? 

However, statistics indicate otherwise. As of June 2019, BofA has about 27 million active mobile users and about 10 million ‘online banking’ customers who do not use the mobile-app. Among BofA customers, adoption of mobile-apps has not meant the abandonment of Online-Banking.

Kindly note that these 10 million are internet-aware and tech-savvy customers and in all probability have and use a smartphone. BofA understands and acknowledges what is happening here. A third of it’s digital-customers have a clear channel preference – Online Banking. It needs to be respected. So, in the near future, BofA plans to extend their award-winning bot, Erica to its ‘Online Banking’ customers as well.

Among the end-customers, the adoption of Mobile-Apps has not come at the cost of abandoning the Online-Banking channel. The lesson for FIs then, is to not ignore the online-banking platform in pursuit of mobile-first design/approach.

The relevance and continued-usage on Online-Banking platforms can be explained by the 3 Perspectives (3P) that favor them.

The three perspectives (3P) are,

1. Varied personas and preferences

Not all customers are alike. For the FIs, it’d be wise to segment the customers within each category (Retail, Corporate, SME) into several personas. These personas, must take into account the demographics, and behavioral traits among other things. A good example/template of Persona classification is shared within the ‘Accenture 2019 Global Financial Services Consumer Study’. In this study, the FI customers are categorized into four personas – Pioneers, Pragmatists, Skeptics and Traditionalists.

The study details, along with statistics, how each persona vary in their preference and adoption of various services and channels.

2. Everybody needs an alternate channel – even your Mobile-First customer

More often that we realize, that our phones are not handy or have simply run out of juice. The online/internet banking platform is still the second-best option.

Also, a transaction (ecommerce or peer-transfer, for example) that starts off in a laptop/tablet tends to favor ‘Online Banking’ as the channel of payment. This helps complete the purchase/payment in the same device, instead of switching devices.

3. Real-estate on the phone

Personally, I hold accounts across 3-4 different banks.  It is neither optimal nor logical to install 4 different banking apps on my phone all the time. Because, there is only so much real-estate on my phone screen. Also, I believe that any app that I wouldn’t use at least a few times every, month is not worth installing. So, when I need to transact with my non-primary account, I rely on internet banking. Don’t we all?

These considerations are valid realities, and strong use-cases is support of Online Banking platforms.In short, the Online Banking platforms still has several compelling use-cases and is expected to remain relevant for a long time. They still have a vital role in meeting the customer requirements and also furthering the banks’ vision.