Making the Move to Mobile-First in Retail Banking

While mobile banking apps have come a long way from the early days of balance inquiry and account history, the fact of the matter is that the existing mobile offerings are still a ways away from meeting customers’ expectations. The growth of mobile use has outpaced that of any other banking channel, which means that a larger proportion of consumers today go to their smartphone first for any banking needs.

In catering to the needs of mobile-first customers, banks must be prepared to support all facets of retail banking through the mobile app. This involves establishing a mobile-first foundation with a customer-focused strategy that takes into account both current and future state channel use. More importantly, it necessitates alignment to a bank’s clear economic goals, such as reduction in branch occupancy expenses through a higher number of transactions occurring through the bank’s mobile app.

Banks’ first step is gathering executive-level support to invest in a mobile-first platform that limits the number of once-off system enhancements and patchwork to existing infrastructure. The objective of this investment is to make the bank more agile from a software development standpoint, instead of constantly integrating new functionality on top of legacy applications.

Establishing a mobile-oriented IT platform can be an arduous undertaking for any service provider, let alone a retail bank. Banks might consider partnering with a fintech company, which would alleviate the bank from starting from scratch. This would also allow the bank to focus on its unique business requirements from a customer perspective while pushing the more technical work to the partner.

Even when the mobile-first platform is stood up, the bank must address its traditional bank customers –who prefer to manage their accounts through non-digital channels such as the branch, call centers or even paper mail – in order to realize the business case.

It is imperative that these types of customers are migrated to digital channels, which is unlikely to occur organically. Banks must take actions such as staffing branches with personnel who can educate customers on the perks of mobile banking. Failure to migrate the broader customer base to the mobile channel can result in swelling operating expenses in supporting both the mobile-first segment as well as traditional bank customers.

Banks are at varying stages of implementing their own mobile-first platform, constantly encountering challenges related to both the development of IT infrastructure and the transformation of traditional bank customers into digital users. Making this move should be a priority for all retail banking institutions in an effort to protect their relationships with a customer base that is highly susceptible to using third-party alternatives for managing money.

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