Mobile-first vs enterprise banking: how traditional banks are closing the gap

It used to be said that people stayed with their bank longer than the average marriage. Fast forward to today, and how consumers interact with financial institutions has changed radically. Switching banks, having multiple bank accounts, online banking, mobile banking, and using different financial apps are all standard practices. 

Mobile has played a key role in this transformation. Mobile-first challenger banks, such as Monzo, Revolut, and Starling have more than 20 million customers between them, and put the pressure on traditional high street banks to deliver seamless and strong mobile banking experiences. At the same time, there’s also been a rise in other fintech apps, whether investment, budgeting, buy-now-pay-later, crypto, lending and more. In addition, the pandemic significantly increased demand for mobile banking services, with a 200% jump in mobile banking registrations in the UK in April 2020 at the start of the pandemic. 

Although mobile banking has been around for some time now, traditional banks are still lagging behind, largely due to the cumbersome nature of the organisations, making them slower than their mobile-first counterparts to adopt changes. So, what can be done to close the gap? 

Focus on app adoption over user acquisition 

 User acquisition is the number one priority for many mobile-first fintechs. Their main challenge is figuring out how they can grow their user base and scale as quickly as possible. Traditional banks that often already have a strong brand and large customer base should be opting for a different approach: app adoption. In other words, how can they move their existing customers from physical or online banking towards mobile banking. 

In order to do this, traditional banks should, at the very minimum, have a mobile app that delivers a strong user experience. According to Facebook IQ’s UK study, half of customers now believe that having an easy-to-navigate mobile app significantly influences their decision making when selecting a new bank. Quick, easy to use, flexible for different purposes, safe and secure are all must-haves in today’s competitive landscape. 

Then, it’s about getting people to the app. QR codes have emerged as a front-runner tactic, but to maximise the chance of success, it’s important that they’re also powered by deep linking technology. This means that when a customer scans the code, they’re either directed to the app store if they don’t already have the app downloaded, or to the relevant page in the app if they do. Crucially, it also gives brands the ability to measure how successful their campaigns are. How many people have scanned the code? Of those, who were existing customers and who were new? Did people then go on to make purchases or drive revenue?  

For example, let’s say a customer is searching for a new credit card. They find a bank with a good offer, go to their website and start filling out preliminary information. With the bank wanting to drive more people to their app, they present the customer with a QR code so that they can finish the application and take out the credit card within the app. The company can then measure the campaign and the performance of these users after. 

QR codes can also be used to bridge the gap between online and offline. For example, when sending a new credit card in the post, adding a small QR code to the envelope can make it easy and seamless for a user to scan it and be directed to the app. 

Focus on the data 

The key to success on mobile lies in data. Let’s take the example mentioned above about placing a QR code on an envelope everytime you send out a credit card in the mail. In theory it’s a great way of bridging the gap between offline and online, but how do you know the impact? Then add all other campaigns you might be running to move people to your app, whether that’s email, web, social media, out of home advertising, or anything else, and it can be hard to know what’s working and what needs to be adjusted. 

By investing in the right measurement tools, traditional banks can get a clear understanding of where their app users are coming from, which marketing messages are resonating, how they should be reinvesting budgets, and get a complete understanding of the customer journey. For example, knowing the first touchpoint allows a bank to optimise the moment when consumers initially learn of its offerings. Having a view of drop-off points throughout the online journey, meanwhile, lets it refine those later touchpoints to make them more engaging. By leveraging data to support digital strategies, banks can not only maximise the outcomes of marketing investments and drive further acquisitions, but also monitor for fraudulent activity.

Build trust 

Finally, it goes without saying that trust is the cornerstone of any good relationship with a customer, especially when you’re handling sensitive financial information. As well as having strong security and fraud protection initiatives in place, being able to effectively communicate their commitment to security also adds an advantage. As an example, greater transparency around terms and conditions, as well as fees, and human-centric language is a great way of building trust with customers. 

Moreover, greater transparency around terms and conditions, as well as fees, is important to UK customers aged 35 and over, while nearly three-fifths of those aged 18-34 want their bank to understand their needs. Mobile-first banks that put a transparent and personalised user experience at their customers’ fingertips can therefore position themselves as trustworthy in the eyes of consumers. 

Traditional banks are constantly under pressure to innovate. Technology is constantly evolving, customer expectations are growing, and there’s growing competition from emerging players. While they may not be able to outcompete nifty fintechs in terms of speed of innovation, traditional banks have the advantage of large existing customer bases, and a strong brand presence. Prioritising moving existing customers to your app, understanding how to measure what’s working and what’s not, and placing a greater emphasis on transparency and trust are all ways enterprises can close the gap on their mobile-first counterparts.