Building A Better Banking App Means Offering Control

The old idea about community and regional banks generally being behind the tech adoption curve is just that: old. Financial institutions (FIs) that lack a big national footprint aren’t letting that stop them from upgrading core systems to serve increasingly digital-first customers.

But there’s still plenty of work for banks to do in terms of digital modernization.

In PYMNTS’ Building a Better App Playbook: The FI Playing Field Edition, done in collaboration with Ondot, we consider the finding that “almost one-quarter of bank customers would be highly likely to turn to Amazon, Apple or Google for banking services if they were offered … and nearly 30 percent would be interested in switching to financial institutions that offered better mobile credit and debit card apps.”

When 25-30 percent of customers express an interest in taking their business elsewhere, something clearly needs to be done. Exploring factors that influence whether people choose a local, regional, national or digital bank in which to place their money and trust, the latest Building a Better App Playbook underscores the need for FIs to be … more.

“Capturing the interest, let alone the loyalty, of digitally oriented consumers requires more than occasionally rolling out new apps or website features,” the report states. “FIs must ensure that their digital banking services offer genuine value and functionality that align with consumers’ shifting demands. This may be truer than ever during the COVID-19 pandemic, as credit and debit cards become go-to payment methods for in-store and online purchases.”

The Difference Between ‘Good’ and ‘Exceptional’

What jumps out of the latest study findings is the generally high digital regard people have for their FIs to begin with. “At least 70 percent of cardholders believe their banks do well in offering digital services via mobile and other platforms,” according to the new report. “Our data reveals distinctions among bank types, however, with 74.4 percent of national bank customers viewing their digital offerings as ‘very good,’ ‘superior’ or ‘exceptional,’ compared to 70.4 percent of their local and regional bank counterparts who say the same. Digital banks stand out, as 77.9 percent of their customers consider their offerings as ‘very good’ or ‘better.’”

Many factors separate “good” from “exceptional” in research – but if you’re looking for one monster influencer, it’s control. Respondents want more of it in their digital banking products, and they are rewarding the FIs that provide it by opening new accounts and cutting old ties.

“Our research indicates that customers at all bank types have similar priorities in seeking better digital services: They want account management to be easier and more convenient, and they want greater control,” the report states. “Those who would be interested in switching to FIs with superior card apps cited these two factors more than other potential motivating factors, such as faster access to information. We found that 67.7 percent of national bank customers who would be interested in switching cited easier and more convenient account management as an incentive, as did 66.2 percent of digital bank customers and 62.6 percent of local and regional ones.”

Give the People What They Want

While the digital domain covers a lot of ground and a dizzying array of possible features, consumers remain focused on the core tasks that drive their lives forward: easy bill payments, P2P transfers, real-time payments and card controls that enable real spend management.

“Our research shows that 90.3 percent of mobile card apps offered by national banks allow users to set preferences for notifications and alerts. We also found that 86.2 percent offer the ability to report cards as lost or stolen, and 74.4 percent enable users to dispute incorrect or fraudulent charges,” the report states.

“Only 82.6 percent of digital banks and 82.3 percent of local and regional FIs offer mobile card apps that allow consumers to set notification preferences. We also found that 82.3 percent of digital banks offer the ability to report cards lost or stolen within an app, and 67.7 percent offer the ability to dispute incorrect or fraudulent charges, as do 77.5 percent and 67.6 percent of local and regional banks, respectively.”