Council Post: Mobile-First As A Prevailing Strategy Of Banking Digital Transformation (2024)

CEO of Cleveroad. Evgeniy is a specialist in software development, technological entrepreneurship and emerging technologies.

The world of global finance has transformed in the last few years, and banking is actively developing new innovations, primarily regarding the mobile experience. Prioritizing a mobile-first strategy has become a global trend for a reason. Worldwide, users want to have a successful mobile banking experience.

Banks have been aware of these changes for a long time, but mobile banking apps (mBanking) weren't always considered a priority. Now, more and more financial organizations are looking at smartphones as the leading platform to engage their clients—and influence them.

Market research confirms the following:

• In the U.S., most users prefer using a mobile app when banking. In fact, 90% of younger audiences prefer smartphone baking, and more than 50% of elderly Americans prefer the same.

• Banking behavior in the UK has also changed. Sixty-six percent of users receive digital services via phone. Even in the eldest group surveyed, more than 50% use mBanking, and in the 18-24 age category, 85% use mobile.

• Canada is the same way—80% of bank customers choose mobile apps for operations. Over the past few years, 37% of Canadians have moved to mBanking.

Having become accustomed to convenient digital experiences during a pandemic; users no longer want to return to their previous routine and expect banks to offer them a mobile solution. Unfortunately, a mobile-first strategy is not as easy to implement. There are many complex topics to address.

Digital Security

A key obstacle to mobile banking adoption is data security. The financial sector is attractive to cybercriminals, and clients know it. At least 39% of customers cite fraud and security threats as their top fear and frustration when using online banking products.

This fear remains a huge stumbling block, and financial institutions will need to address it with advanced security tools like biometric authentication.

Mobile banking has long used complex security systems: safe data transfer protocols, password control, SMS login confirmation, etc. However, multi-factor protection is not enough without user identification via fingerprint or face/retina scanning. Most modern smartphones are equipped with technology for this, so users rightly expect such features to be implemented in mobile banking apps. It significantly increases customer security—so much so that biometric authentication is expected to affect at least $3 trillion of banking transactions by 2025.

Legacy Banking Systems

Digital banking, in the traditional sense, is cumbersome, branched and technically complex. Such solutions have been around for years, if not decades, and are hard and expensive to transform. This makes banking and financial institutions an easy target for competitors from innovative fintech startups. The more this "debt" accumulates, the more difficult it is to come back from it.

Financial institutions need to adopt full-fledged e-banking ecosystems with independent mobile apps linked directly to their platforms. Such applications may be third-party and connected to your main system via open APIs. Open banking is a practical way to master mobile solutions without deeply restructuring your entire technological system.

With open APIs, banks can:

• Share data with mobile app providers, providing users with financial analytics, investment planning solutions and IoT integrations.

• Make elegant user experiences. Third-party mobile solutions allow banks to offer users an improved experience while maintaining your platform’s multi-functionality.

• Increase user loyalty and attract new customers. People appreciate all the things mobile apps provide, such as the ability to manage all transactions through a single platform.

The Customer Experience

The customer experience enhancement that comes with mobile banking is worth considering in detail. Banking business processes are not keeping up with the digital needs of their audience. As cited in the World Retail Banking Report 2022, banking software's transparency, convenience and social responsibility do not fully meet the customers' needs. These things are important: A Mobiquity survey found that at least 40% of respondents are willing to switch bank accounts if their provider doesn't provide a quality online service.

Mobile applications solve this issue with a few capabilities:

• Qualitative And Quantitative Data Analytics: These analytics refine audience assumptions, reveal pain points, identify personas and ways to improve the customer experience and help prioritize technology and services.

• Personalized Customer Experiences: This includes peer-to-peer payments and direct loan requests, intelligent chatbots, budgeting and personal finance tools and customized offers in mobile apps.

• Contactless Interaction: mBanking applications can be installed on smartphones that support NFC, QR code reading and voice recognition. This allows contactless interaction with payment terminals and ATMs.

The growing importance of a mobile-first approach has been influenced by a variety of factors that vary from post-pandemic changes to the expectations of customers who have never lived in a world without smartphones. For your product to become an integral part of this digital transformation, it must meet the following requirements of innovation:

• Leverage the possibilities provided by high-speed communication standards. 5G helps optimize data transfer and improves the customer experience through a stable connection and smooth, uninterrupted app operation.

• Focus on wearables. They are excellent for analyzing data and generating reports, which will expand your mobile experiences across the board.

• Implement technologies surrounding edge computing. This tech minimizes waiting time and helps maximize the efficiency of autonomous systems associated with your mobile app.

• Consider incorporating on-demand apps into your mobile strategy. Uber-like banking products offer services when (and where) users need them.

Mobile banking will only continue to grow in importance for customers over the coming years. Even if you don't focus your digital power entirely on mobile platforms, it is worth giving them more of your attention.

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