Mobile banking to grow to 2B users by 2020: report
Mobile banking users are set to reach 2 billion by 2020, according to a new report from Juniper Research, suggesting that banks are placing as much effort on digital marketing and tools as traditional brands.
The research comes from a retail banking report authored by Juniper that examines the trends of mobile and digital banking between now and 2021. Juniper finds that the user base for mobile banking apps will continue to balloon over the next five years.
“Juniper Research believes that the future of digital banking will depend on banks and FIs offering customers and clients more targeted and more relevant options that are aimed at specific user needs and experience,” said Nitin Bhas, head of research at Juniper. “This will be enabled through customer analytics and a number of other emerging information and data management technologies.”
The new research supports the hypothesis that banks are making just as much use of new mobile innovations as regular brands.
While online banking is not new, the increasing popularity of mobile as a tool for banking is just now beginning to be understood. In fact, Juniper found that in some markets mobile banking logins is overtaking desktop bank logins.
“Banks now regard digital banking (including mobile and wearables) as a vital element of vendors’ business models that can, and should, be made universally available to improve customer churn, revenue and profits,” Mr. Bhas said. “Banks and FIs will need to offer customers and clients a more targeted and more relevant options that are aimed at specific user needs and experience.”
Other industries have long understood the importance of mobile as a marketing channel. Now the banking sector is catching up and, if the predictions hold up, will continue to expand its mobile popularity with consumers.
As for the future of banking apps and how they relate to consumer needs, Juniper predicts that banks need to open up their platforms to third party sources to widen the abilities that their banking apps can offer to consumers.
“Fintech integration and open API platforms will become more important in the future, i.e. the ability for third party services (such as crowdfunding tools, investment services, cryptocurrency platforms, etc.) to ‘plug in’ in their offerings to the bank,” Mr. Bhas said.
Wilson Kerr, vice president of business development and sales at Unbound Commerce agrees with the assessment that opening their APIs to third-party apps and brands will be the best way for banks to make the most of mobile in the future.
“Apps can harness trusted phone features like Apple Pay to reduce checkout friction,” Mr. Kerr said. “Apps can tap into loyalty programs and reward customers for patronage.
“Banking apps drive deep engagement and deliver real value, which is why so many consumers love them.”
Mobile banking apps, by their nature as software that requires a certain level of trust from consumers, give consumers a highly intertwined relationship with their mobile devices and the banks on the other side. This means that they are a ripe area for attempting new ways of connecting with consumers on a mobile level.
“Mobile banking is the tip of the spear and shows what is possible, regarding the potential for mobile apps to alter entrenched consumer behavior and add utility and convenience,” Mr. Kerr said. “Mobile banking showcases the power of apps and the benefits that harnessing on-board smartphone functionality like the camera for remote check deposit and live chat to engage customers.”
On the retailer side, the rise of banking apps is a signal that they should begin looking for ways to target a consumer base growing increasingly comfortable with the idea of keeping financial information on their phones and making purchases through them.
“Smart retailers will look to the meteoric rise of banking apps as a signal that they should begin the process of asking themselves how an app could help them solve a problem for their customers, while adding retail sales to their bottom line,” Mr. Kerr said. “For example, apps can allow a furniture retailer to offer virtual show rooms and the ability to place images of furniture for sale into homes.”