Only 3pc of consumers submit bank account applications via app: report
Despite becoming one of the hottest trends in ecommerce as of late, consumers are showing some trepidation towards the way that the mobile payments sector is progressing, according to a new report from ath Power Consulting.
Ath Power’s study comes as a result of a survey of over 3,000 respondents, taken in January 2017. Among other significant findings, the survey claims that eight out of ten respondents consider digital banking to be their preferred way to bank, and 91 percent of respondents feel digital banking is important to their overall banking needs.
“As far as banking goes, our survey reveals great interest in the potential offered by the convergence of digital banking and digital payments,” said Ed O’Brien, executive vice president of research and strategy at ath Power Consulting. “For example, almost two-thirds (64 percent) of digital banking users said that paying by mobile phone would be desirable or very desirable.”
One metric contained in ath Power’s report should be of serious concern to any mobile banking purveyor: the study found that 65 percent of consumers are highly satisfied with their digital banking solutions, a decline from 73 percent in the company’s last study.
“The heightened expectations of today’s tech-savvy consumers combined with the lack of advancement and improvement of their financial institution’s digital solutions have certainly contributed to this drop in satisfaction,” said Frank Aloi, CEO of ath Power. “To maintain a competitive edge, FIs must move beyond basic functionality and accelerate their pace of innovation.
“For those already offering advanced capabilities, our research revealed that some solutions are not yet acceptable in terms of usability, causing frustration among consumers.”
The study also found that 64 percent of consumers are interested in using all types of mobile payments. In particular, person-to-person payments (P2P) such as Venmo and are growing in popularity, with 44 percent of respondents already using this feature.
55 percent of respondents would prefer that their primary financial institution handle these types of payments (a need already addressed for Chase customers through its QuickPay service), 37 percent have no preference as long as they can conduct the transaction via their mobile device, and only 8 percent prefer a non-bank service provider such as Venmo or Square Cash.
The report claims that consumers are more trusting of their financial institutions, but many still choose non-bank providers for their fast, free, user-friendly mobile applications, a preference that financial institutions can take advantage by rolling out dedicated P2P that work outside of mainline banking apps.
Despite whatever qualms users may have about digital payments, brand and financial institutions are trucking along with the sector’s development, for good reason: In a ringing endorsement for mobile payments, a new report found that half of the fastest-growing companies offer in-application purchases and mobile payment opportunities (see story).
And Mastercard and Unilever are collaborating on a series of initiatives centered on proliferating digital and mobile payments infrastructure to help small and micro-businesses in emerging markets (see story).
“Mobile devices are critical to the use and adoption of digital payments,” Mr. O’Brien said. “And with more financial institutions working with their fintech partners, many are creating a banking and payments framework that includes open APIs and integration hubs for greater interoperability.
“From a banking perspective, banking customers increasingly want to use their mobile devices for a wide variety of banking and payments activities. For example, over a half of respondents expressed interest in such advanced digital features as loyalty programs and discount coupons, with over a third showing interest in PFM/a view of personal finances and mobile payments.”