My Digital Banking Nirvana

Last week, I was fortunate enough to be one of the keynote speakers at the inaugural Next Bank Sydney. In preparation for my presentation entitled, 'My Digital Banking Nirvana', I looked globally for mobile banking applications that were the best at being simple, encouraging engagement and being contextual.

With help from the team at Mapa Research, I came up with almost 30 components for my perfect mobile banking relationship from every region of the world. Some were completely unique, while others were mobile applications that multiple financial institutions provide.

Link to my Next Bank Sydney presentation, My Digital Banking Nirvana on SlideShare here

What Makes a Great Mobile Banking Application

In many ways, there is no difference between what makes a great mobile banking application and what makes a great non-banking mobile application. The key components are:

• Simplicity: Does the app replace a non-mobile process I do often? Does it make my daily life easier? Is it easy to use? In the non-banking world, I love the KeyRing application because it stores multiple loyalty cards in one place on my mobile phone, eliminating the need to carry plastic cards. The app also links to digital offers I can redeem without cutting coupons.
  
• Engagement: Does the application stimulate positive interaction, and build a better application from this engagement? For me, my Marriott mobile application does a great job. Beyond providing the standard ability to make reservations and check my loyalty balances, it also allows me to check in early, receive notifications when my room is ready and informs me about special offers through multiple channels.
  
• Contextual: One of the benefits of a mobile application vs. an online tool is the ability to provide value based on where I am located. My favorite app from a contextual perspective is OpenTable. Using locational functionality, OpenTable provides suggestions of restaurants based on my current location and previous dining experiences. Reward points are provided for using the app and starting next year, the app will also allow me to pay for my meal using my phone and the OpenTable application.

So, which mobile banking applications meet one or more of the above criteria and could become part of my digital banking nirvana? As could be expected, this list is fluid, since new innovations are being introduced every week, replacing previous applications that were once best-in-class.

Mobile Banking 'Basics'

As an active mobile banking user, there is some functionality that must be the foundation for my best-in-class mobile banking relationship. First of all, as covered in a recent blog post entitled, Banking Innovation for the Fat-Fingered, leveraging mobile imaging technology and my phone's photo capability simplifies mobile banking by removing keystrokes and improving accuracy. Therefore, I expect my future mobile bank to provide the following:

• Mobile photo account opening using just my drivers license
• Mobile photo bill pay
• Mobile deposits
• Mobile photo balance transfer

In addition to leveraging the photo capabilities of my phone to simplify my banking, I would prefer to eliminate many of my password and authentication steps, while not having to worry about security issues. One potential solution is to integrate Capital One's new SureSwipe login feature into my new mobile banking relationship. With SureSwipe, I remember a pattern as opposed to passwords, making my login easier as shown in this humorous video.

I also do not want to go through a series of authentication steps just to see the balance in my account. In the U.S., GoBank provides me the opportunity to see my balances with a simple swipe of the finger. GoBank is still one of the few banks in the U.S. to provide this instant balance feature, even though Mapa Research found close to 20% of major banks worldwide offing this functionality.

Banks overseas offering a similar capability included Commonwealth Bank's Kaching, Swedbank's 'balance shake' and Bank of New Zealand's mobile app that allows you to see your entire relationship without a full login.

Other benefits of GoBank I would like to include as part of my digital banking nirvana include having a wide range of customized alerts, a negotiable monthly fee, and their 'fortune teller' that informs me when I might be spending money I will need later. (I covered the reasons I like GoBank in a Financial Brand blog post here)

Going a step further, I would prefer not to type any information at all into my phone for basic mobile banking. If I had USAA's Virtual Assistant powered by Nuance, that would be possible since members are able to use voice commands to perform basic banking tasks. Nuance is also testing a similar solution at U.S. Bank.

  

Mobile Payment Applications

Beyond the basics, no other functionality of mobile banking is as important as payments. Despite high industry attractiveness and relatively low consumer acceptance (in the US at least), mobile payments is the Holy Grail of mobile banking and is the potential tipping point in the battle between bank and non-bank providers. From making payments to tracking payments, the diversity of payment applications globally is exciting.

One of the most comprehensive mobile payment applications is from Commonwealth Bank in Australia. The CommBank Kaching application provides the ability to make P2P payments by bumping phones with another person, using a mobile phone number or email address, or even through Facebook. For bill or merchant payments, QR codes can be used and NFC payments are supported with internal Android functionality and with a CommBank Paytag on iOS devices.

CommBank Kaching Mobile Payments Functionality

Once payments are made, some of the best mobile receipt capabilities I have seen have come from the new banking competition in the U.S. I am a user and a fan of the Moven digital receipt capability that provides me real-time feedback on my PayPass or debit card purchases as well as contextual transaction insights (the application also has spend tracking to compare spending to previous periods and the ability to pay friends by email, mobile or via Facebook).

It would also be nice to include the ability to add pictures to my receipts as offered by Simple in addition to having real-time adjustments to my safe-to-spend and budgeting insight. Simple also provides a very comprehensive search capability that can assist the tracking of spending using 'Google-like' queries or hashtags for spending categorization. Poland's mBank also provides transaction search capability using Google-like queries supported by the excellent Meniga PFM platform.

Simple Real-Time Receipts with Safe-to-Spend 

 Simplified Budgeting

I understand that my mobile phone is not the best platform for enhanced budgeting, but I still want to be able to track how I am doing each month using my mobile device as an adjunct to the online banking capability on my desktop. This requires striking a very careful balance between form and functionality.

As I mentioned, I am a fan of both Moven and Simple for their tracking and budgeting capabilities. Both allow me to see my financial position compared to previous periods and utilize a mobile-first design. The visualization of spending behavior is excellent with the use of easy to understand graphs on both the online and mobile platforms.

For me, one of the best personal financial management (PFM) tools has been developed by MoneyDesktop. Using some of the most advanced user interface design capabilities in the industry, their MoneyMobile solution takes some of the best functionality from their online application and creates an excellent visual interface for mobile devices.

MoneyDesktop Mobile PFM Solution

Channel Integration

As much as I am looking for the ultimate mobile banking experience, I realize that mobile may not be the best channel for all of my interactions with my bank. In those instances when I want to use online banking tools, talk to a customer service representative or visit a branch, I still use the same criteria of simplicity, positive engagement and contextual functionality.

As I travel between online, mobile and my tablet, I don't want to relearn how to conduct my banking. While I may want added functionality that takes advantage of the tactile and interactive benefits of the tablet or the expanded canvas of the desktop computer, I want the 'feel' of the experience to be similar.

Westpac New Zealand recently introduced an excellent device agnostic solution  that provides a similar look and feel across devices. In addition to using a responsive design (making the look conform to the device and how the device is held), the use of a 'central platform' will simplify changes in the future.

WestPac Device Agnostic Central Platform

When I have a problem with my account, the last thing I want to do is search for the appropriate phone number for customer service or wait until I get home. Therefore, the ability to have an integrated customer service capability within my mobile banking application is a must.

NatWest and RBS were the first two banks in the U.K. to offer in-app, real-time customer service whereby a customer can initiate a conversation with a dedicated Mobile Chat advisor. In addition, ING has a mobile application that allows for direct appointment setting with a specific agent in a few easy steps.

NatWest Mobile Chat

Going one step further, Turkey-based Akbank became the first bank to offer video chat. Customers can make a one-click video call from within the bank's online banking site to one of the bank's video enabled service agents. No additional software is needed and the application will soon work on Android and iOS devices as well.

Akbank Video Chat

Finally, for those potential instances I may want to use a branch, the traditional branch just doesn't meet my needs. I want to be in and out as quickly as possible and most likely won't need to see a teller. Banks globally are trying to address this change in customer behavior by scaling back traditional transaction-centric branches and replacing them with either advisory-centric units or technology-enabled branches that leverage video and advanced transaction capabilities.

National Australia Bank (NAB) recently opened their first 'Smart Store' where traditional tellers have been replaced by full service machines. These new branches take less space, will potentially have longer hours and are geared to the lifestyles and digital-savvy nature of Customer 3.0. (This new branch format was covered by The Financial Brand here)

Expanded Mobile Functionality

As with any avid mobile banking user, I want even more from my mobile banking experience than just basic transactions, payments and basic money management. For instance, I have definitely come to enjoy my PNC Bank ATM/Branch Finder, that uses augmented reality to allow my phone to search and find facilities through the screen on my phone. Interestingly, while I find the app useful, I am intrigued as to why the app isn't integrated into my normal mobile banking application (PNC Finder is a separate app).

With the demise of most points programs associated with debit card usage, more elaborate (and potentially more lucrative) merchant-funded rewards programs have taken their place. Unfortunately, the vast majority of these programs require a proactive opt-in on an offer level basis and are connected with the online banking relationship as opposed to mobile banking. This makes taking advantage of any rewards cumbersome at best and downright maddening most of the time.

To address this problem and to provide locational rewards using my phone's GPS capability, Cardlytics is enhancing their merchant-funded reward program in early 2014 to include a much more user-friendly rewards program that will provide offers based on where the customer is located. This functionality is already available from American Express with their My Offers program that leverages both transaction history (what I do) with locational information (where I am).

Support of Wearable Technology

As long as I am trying to develop my digital banking nirvana, I might as well look a bit further into the future and make sure my mobile banking relationship can be supported by wearable technology. While definitely not for budgeting or more difficult mobile banking transactions, both Google Glass and SmartWatches can potentially be effective for mobile alerts, balances, simple transfers/payments and augmented reality ATM/Branch finding capabilities.

Two banks are setting the pace globally for wearable technology integration. Banco Sabadell has already used an open app development forum to create mobile banking using Google Glass. As covered by The Financial Brand, the first iteration of 'banking by glass' includes balance inquiry, the ability to get alerts and find branches and eventually deposit a check by looking at it.

In addition, Westpac New Zealand has created the first SmartWatch banking app that leverages the bank's Cash Tank application. Initially only providing balances without formal login, the application is expected to also include the ability to get alerts and do transfers in the future.

One Last Word on Mobile Banking Innovation from Australia

It is clear that the development of innovative mobile banking applications is an ongoing process with new applications and capabilities being introduced almost every day. Therefore, it is important for those searching for digital banking nirvana to not only keep up with industry trends globally (much of the innovation is being done in the Asia Pacific region as mentioned in my recent blog post on innovation), but to also partner with those banks that have innovation ingrained in their culture.

I was lucky enough to be surrounded by many banks at Next Bank Sydney that obviously do more than just talk the talk on innovation . . . they walk the walk. It was apparent that each institution put a high premium on future thought and were encouraged to think out of the box and not be afraid to fail. The energy level of people from these banks was high and there was an amazing willingness to share from each other as well as leaders globally.

Beyond Australia, banks like CaixaBank and HanaBank, as well as USAA, Moven and Simple in the U.S. are ones to follow. I also am intrigued by BBVA, where their Innovation Center is both robust and very public. In addition to a public Innovation Center web site, there is also a LinkedIn and SlideShare page, sharing ideas that have been developed and discussing the innovation process at BBVA.

It is clear that my digital banking nirvana will be a moving aspirational target. But, if I was to combine what is available globally today into a single mobile banking app, I would have a killer mobile banking relationship with my bank.

MY DIGITAL BANKING NIRVANA from Jim Marous

Additional Resources

My Digital Banking Nirvana - Jim Marous on SlideShare (Nov. 2013)

Mobile Banking 2013: Are You Following or Leading - Mapa Research (June 2013)

Banks Accelerate Mobile Banking Innovation - Bank Marketing Strategy (June 2013)

Banks Sit On Sideline As Tablet Growth Continues

According to PEW Research Center, tablet adoption has almost doubled over the past year and for the first time, a third (34%) of American adults currently own a tablet computing device, including almost half (49%) of those in their late thirties and early forties and a majority (56%) of those in higher income households.

With this platform becoming increasingly important to customers, banks and credit unions can no longer sit on the sidelines and watch as the digital landscape develops around them. Unfortunately, with limited resources, new research indicates that development of native tablet apps has occurred at a snails pace due to limited resources and a focus on developing new smartphone applications.

In a just released report from Celent entitled, Tablet Banking: An Evaluation of Tablet Apps at the Top 13 Banks, it was found that only seven of the top thirteen US Banks have a live iOS tablet app, and only two of the top banks have a native Android app. In many cases, banks are using their online banking platform as the foundation for tablet users or are making adjustments to their web portals for tablet use.

“Consumers are rapidly growing more accustomed to interacting with their financial institution through devices other than PCs,” says Jacob Jegher, Research Director with Celent’s Banking Group and co-author of the report. “Celent believes that tablet banking represents a tremendous opportunity. However, banks aren’t exactly scrambling to release tablet specific apps.”

Unfortunately, the lack of commitment to the tablet user is not a new phenomenon. In May of 2011, I covered this problem in a post entitled, Banks Slow to Embrace Potential of Tablet Computing. 

Tablets Require Special Attention

As part of the Celent study, it was found that many banks remain unclear as to how the channel should be classified. Is the tablet platform an offshoot of online banking? Is the platform better supported by the mobile banking team? In reality, tablets are a unique platform that deserve individualized attention. According to Stephen Greer, Analyst for Celent and co-author of the report, "Tablets take the best of the PC and the best of mobile and combine them into a device that offers functionality, portability and a rich user experience."

Use cases also need to be taken into consideration when working with multiple platforms according to Greer. "Online banking is functional, complex, and a daytime/work activity, while mobile is quick, contextual and on-the-go. Tablets, in contrast, are often leisure devices, catering to casual couch browsing and intermittent time killing." In addition, since many people multi-task with a tablet device (watching TV, etc.), the visual and tactile functionality of the tablet must be leverage to optimize the user experience.

Because of the interactive dynamics of this platform and the large number of device manufacturers and dimensions need to be supported, a larger investment in development and testing is required. In addition, to date, many organizations have had difficulty measuring the incremental financial impact of this investment. This may be the reason supporting this platform has been so slow.

Evolution of Tablet Banking

While the primary emphasis of the Celent report was a very thorough review of each of the top 13 US banks' tablet application(s) with detailed visual support and commentary on each bank's execution, there was also a review of key trends in the tablet banking marketplace. These trends were reinforced by other research done by Mapa Research in March and Fiserv in a report last month.

• Interactive dashboards that leverage the tactile benefits of the tablet
• PFM tools that add value through unique visualizations of financial insights
• Social media integration beyond customer support and promotion
• Unification of devices to provide common looks for basic functions
• Easily accessible insight such as balances, ATM/branch locations, etc.
• Focus on simplicity using photo capability for account opening, mobile deposit and bill pay
• Speech recognition to minimize keystrokes and improve user experience
• Enhanced security potentially leveraging biometrics

Similar to the excellent analysis Celent has done for mobile banking, they believe that tablet banking is in an ever-changing evolution of functionality and applications. As with mobile banking, each bank is in a different stage within this evolutionary process, with a goal to move to even smarter tablet banking capabilities as shown below.

Tablet Banking Evaluation

As mentioned, in the Celent evaluation of the top 13 banks in the US, only seven currently have iPad apps and only 2 have Android apps. This is obviously a surprisingly low number for banks that should be setting the pace for the industry. Most of the banks evaluated are working feverishly to innovate on their smartphone platforms which has impacted the ability to focus on tablets at all, while others have only updated their initial tablet application one or two times.

Celent found that most of the tablet applications evaluated were 'transaction enablers' as opposed to leveraging the visualization and tactile nature of the tablet platform. Of special interest would be the inclusion of more PFM applications since Raddon Research found that tablet owners (27 percent) are found to be twice as likely to use PFM tools than non-tablet owners (12 percent).

While the scoring, final rankings, screen shot evaluations and final 'Xcelent' awards for the top 13 US banks can only be shared with subscribers to Celent research, a less robust ranking of iPad banking applications is available by viewing the top 200 apps in the iTunes store. 

In 2011, only 7 banks were ranked in the top 200 iPad apps in the finance category. The good news is that Bank of America, Chase and Wells Fargo are now the top 3 downloaded free iPad finance apps on iTunes according to padgadget.com, with Citibank (13), U.S. Bank (19) and PNC (22) ranking in the top 25 (28 banks are in the top 200). The bad news is that most of the largest banks are not rated very highly by users (First National Bank of Omaha (5) and Peoples United Bank (8) are the highest ranked iPad finance apps according to Padgadget.com here).

Some Tablet Innovations

Mapa Research reviewed innovative tablet uses globally in March, 2013 and shared many of these unique apps in their study entitled, Tablet Banking Series: Branch on the Go?. Below are some of the more interesting screen shots that caught my attention. The 75 page report has over 50 screen shots covering many different tablet applications as well as outlining a blueprint for success from their perspective.

Citibank: Integration of Check Visuals for Tablet Application

Amex: Upon first sign-in, all features of app are highlighted

KBC Bank: Social media integration includes sharing of savings goals

Raiffeisen Bank: Direct access to applicable advisor

The key findings of the Mapa research included:

• Innovative features and services focus on providing both convenience and a smooth user experience for both transactions and browsing, creating the tablet almost as a “on the go branch”. This is highlighted by the incorporation of access to advisors and features which aim to increase banks revenue.
• Personalization and PFM go hand-in-hand. While not all users utilize the PFM feature, it is essential that incorporating this service incorporates a high level of customization. Furthermore, the ability to customize even basic features such as the color and layout enhance the customer journey.
• While there are mixed findings on the eradication of Apple’s market share for tablet device by Android and Kindle tablets, the iPad should be the device of priority for innovation due to demographics of user and web usage volume.

The Future of Tablet Banking

It is clear that digital channels are no longer 'alternative' channels. In fact, they are the fastest growing financial channels in the history of banking and are supporting an ever changing consumer who is more connected than ever. As more tablets are purchased and the capabilities of the devices expand, banks and credit unions must evolve to meet customer expectations. This will require a clear, focused and integrated strategy for tablet banking as well as for all digital channels.

Institutions of all sizes can't continue to sit on the sidelines, providing vastly underdeveloped tablet applications or 'canned' solutions. While it can be expected that mid-sized and smaller institutions will lag their larger counterparts in this development process, monitoring best in breed in the US and overseas is one of the keys to success. This evaluation of what is possible should be done by product managers, marketers, as well as other senior executives in the organization to set the foundation for future strategies and development.

Note: The Celent research on the tablet banking applications at the top 13 banks in the US is a report that complements a similar series of evaluations done by Celent on mobile banking. Analysis of this report Celent was done by Bank Marketing Strategy in August 2013 entitled, Today's Mobile Banking Apps: Table Stakes or Cutting Edge.

Additional Resources

Tablet Banking: An Evaluation of Tablet Apps at the Top 13 Banks - Celent (September 2013)

Tablet Ownership 2013 - Pew Research Center (June 2013)

Banking on the Tablet Channel - Fiserv (August 2013)

Portrait of Today's Tablet User - Wave II - Frank N. Magid Associates (June 2013)

Tablet Banking Series: Branch on the Go? - Mapa Research (March 2013)

User Insights Volume Two: Comparing the Desktop and Tablet Banking Experience - Corporate Insight (August 2013)

iPad Apps Tracker: Top 200 For Finance (Free) - Padgadget.com (updated several times a day)

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