Hyper-Casual Banking

If you own a smartphone, the chances are you have at least one gaming app installed. You know, for those rare moments when you have a few minutes to spare and just need to switch your mental focus. However, with the ever-increasing power of smartphones’ processing capabilities, mobile games have become much more sophisticated, with so many features that many users give them up after a few minutes. This increasing complexity negatively impacts the customer engagement level and consequently the mobile gaming company’s revenues.

To attract these ‘time-poor’ users, mobile gaming companies created a new category called “hyper-casual” games. As the name suggests, they are lightweight games with a very simple mechanics. Literally ‘tap to play’. Because of their fundamental simplicity, hyper-casual games are not only instantly playable but also highly addictive; this combination of simple mechanics with minimalistic user interface (UI) provides a very accessible and engaging user experience.

What does all of this have to do with banking?

The simple answer is this: it is an excellent example of an industry that reconsidered how to attract disengaged customers and, as a result, has simplified its products to create a much better customer experience.

Banks traditionally classify their customers by income levels and create propositions for each segment. However, they don’t often apply the same rationale to their digital channels. Regardless of customer segment, in most cases the internet and mobile banking experiences are broadly similar. The questions remain: should banks tailor their digital channels to different customer segments? Should customers have a choice on how sophisticated the interaction with their bank should be? Perhaps banks should simplify their customer journeys to cater for the light users of digital banking. Let’s call it ‘hyper-casual banking’.

‘Light’ vs ‘Heavy’ users

In a recent research study from comScore, customers were classified according to the amount of time they spent on digital banking channels. The study found that ‘light’ users constitute 50 per cent of the online banking audience but spend just seven per cent of their phone time on banking sites and apps, whilst ‘heavy’ users constitute 20 per cent of the online banking audience but spend 71 per cent of their time on banking sites and apps.

The reality is that for a large segment of customers, there are functions on their bank’s digital channels that are never (or very rarely) used, resulting in unnecessary complexity which only serves to add friction to the customer journey. Heavy users (the minority) are comfortable with such level of complexity and know how to navigate the bank’s website or mobile app. However, the light users would certainly appreciate a simpler, scaled-down version of digital channels. This could be an effective approach to re-engaging this segment of a bank’s clientele.

Some very popular platforms have adopted this concept, launching simpler versions of their apps. Examples include Facebook Lite, Spotify Lite and Gmail Go. Interestingly, that is also the path being followed by most challenger banks. This is not just a user-interface design trend, but the result of a shift toward customer-centric technology strategy based on a modular and more flexible model.

How did they manage the transition?

The answer is two-fold. They invested in interface design, but also created a business model based on APIs and micro-services.

Whilst an increasing number of banks are joining the Open Banking ecosystem, opening up access to their customer data, the customer digital experience remains largely unchanged. It could even be suggested that it has become a little bit more complicated now, given the fact that customers also have to manage their consent to third parties and become familiar with the strong customer authentication (SCA) process.

Adapt your digital channels

If you want your organisation to be in a position to compete in this new digital ecosystem, perhaps you should consider how to engage different types of customers and adapt your digital channels accordingly. The building blocks of the Open Banking standard allow banks to assemble digital experiences in line with customer’s expectations. One mobile channel does not fit all.

Are you leveraging the Open Banking standard to simplify your customer’s journey, technology infrastructure and operations? Do you have a roadmap to create different levels of digital engagement to serve different customer segments and expectations?

Wherever you are in your Open Banking journey, it is worth considering the business opportunity that is serving your hyper-casual customers differently. An API driven strategy will help your organisation to accomplish this change in the most cost-effective way.