Banks and Credit Unions: Your Fate Hangs on Your Mobile Experience

In the banking industry, mobile is increasingly threatening more traditional delivery channels, representing both a significant risk and an substantial opportunity. Unfortunately, the mobile experience delivered by both banks and credit unions is underwhelming, resulting in a mountain of lost opportunities.

Mobile now plays a fundamental role in consumers’ lives. eMarketer estimates that customers spend nearly three hours per day on their mobile device — more than on their computers. Meanwhile, 47% of Millennials in an Annalect study noted that someone else’s following, liking, pinning, or tweeting info on social media had helped introduce them to a brand. In April 2015, Google announced that “Google Search will be expanding its use of mobile-friendliness as a ranking signal.”

And yet the banking industry’s mobile capabilities lag far behind consumers’ expectations. Not only do financial institutions need to catch up, they must also worry about being able to deliver what customers will expect three to five years from now.

How should banks use mobile to build relationships and increase sales? A report from Celent, commissioned by Facebook, says that banking providers who get it right will engage consumers more deeply, win a disproportionate share of customers, have greater success defending against fintech challengers, achieve better cross-sell rates, and improve customer satisfaction.

Needless to say, the stakes are high.

The report from Facebook and Celent focuses on how banks and credit unions can leverage mobile specifically as a relationship-building and sales tool. Dan Latimore, SVP of Banking at Celent and author of the report, says that well-designed mobile interactions simplify the user experience and minimize the effort required to enjoy it.

“Good apps and mobile websites feed content to users rather than depending on them to track it down,” Latimore explains. “Users swipe, not mouse. Tap, not type. They have a camera, GPS, and an authentication mechanism conveniently at hand.”

Three Stages on The Mobile Path to Purchase

Celent outlines a simple three-step path-to-purchase model, where each phase builds on its predecessor. First you build awareness of your brand and products, then you help the customer solidify their intent to purchase, and ultimately make it as easy as possible for them to actually purchase.

1. Awareness/Brand Building. Building your brand and awareness is an ongoing and continuous process that rarely generates an immediate payoff, but not all interactions on mobile devices need to be built around “selling.” As consumers increase the time they spend on their phones, the device’s role in brand-building will become ever more important.

2. Intent. A potential customer may be pushed or pulled to seek a product or service for a variety of reasons. At this stage, the consumer is deciding which solution/provider will best suit their particular situation. To ensure the customer progresses down the right path, financial institutions should determine their needs, demonstrate how they can meet those needs, and create some urgency to begin the purchase, recognizing that timing is highly variable — from immediate (I’m in the dealership and I need to finance my new car), to very long (I really should refinance my mortgage at some point).

3. Purchase. It this “Purchase” phase where banks and credit unions have so much ground to make up. When moving to a new channel, financial institutions will often try duplicating an existing process by simply porting a solution over from an incumbent channel to the new one (e.g., copying a mail-in credit card application and plopping the exact same form in online/mobile channels). The practice is so common that Citibank had dubbed it “channel cloning.” But as the experience moves from online to mobile, this practice is particularly pernicious; the user experience is simply too painful with such a small screen and no stand-alone keyboard.

It’s hard to argue with the conclusion that both Facebook and Celent draw in their report: that mobile devices — whether being used to access a bank app, a bank mobile website, or a third-party app/website — are a powerful tool on this path to purchase.

Latimore at Celent says banks should strive to make the entire process as compelling, engaging, and emotionally rewarding as possible. “There are reasons that terms like ‘seamless,’ ‘simple,’ and ‘frictionless’ are now the dominate UX design themes,” Latimore explains. “Consumers have been conditioned to expect that experience from non-banks. Financial institutions that can’t deliver lose potential customers.”

And for a bank or credit union to lose a customer who has begun to engage in the mobile purchase process is a huge opportunity wasted. Unfortunately, the abandonment rate among consumers attempting to open new accounts is extremely high, with some reports as high as 99%.

“Customers expect an easy experience no matter how difficult it is for the bank to provide it,” Latimore points out. “Applying for a mortgage shouldn’t be terrible just because it’s not as straightforward as asking for a credit card.”

8 Tips for Mobile UX Design

According to Celent, it boils down to these three imperatives: bring the consumer easily to the purchase point, eliminate closing friction, and fulfill their institution’s brand promise. To help accomplish those goals, Latimore offers the following advice and insights to banks and credit unions:

1. Avoid “channel cloning.” You must craft the path-to-purchase and application process with a mobile-first mindset. The user experience should be uniquely specific to mobile.

2. Design the experience specifically for mobile. With mobile UX design, you need to take into account the realities of reduced screen real estate and difficulty typing. On the positive side, there are the advantages of a camera, geolocation, and authentication mechanisms.

3. Lighten the consumer’s load. Rather than force the customer to do the work and self-serve, the financial institution should do the heavy lifting. Spare the customer the effort. Done right, this process can reverse the decades-long trend toward customer “self-service” (a euphemism for “we’re too cheap to do it for you”).

4. Think ‘backward compatibility.’ If your mobile UX is designed well and works, it’s likely to work in other digital environments as well. Consider rolling your mobile UX — once perfected — into your other delivery channels.

5. Chop out steps. Taps matter — make each one count, and take the consumer exactly where they need to go. When designing mobile processes, you need to reduce choices and guide the process.

6. Streamline with total focus and discipline. The process must be made as easy as possible. Eliminate distractions. Get consumers to the mobile application screen quickly and efficiently. Focus maniacally on getting the process started, and ignore the temptation to cross-sell.

7. Adopt an integrated, omnichannel approach. Media and conversion paths used to be separate and distinct, but mobile has begun the process of intertwining them, highlighting the importance of building relationships. Recognizing this, investing in relationships, and providing value in mobile interactions should lay the groundwork for increased sales.

8. Learn from other industries. As banks and credit unions consider how to build for the future, they can observe more advanced behaviors from other industries and plot a course specifically based on where they’d like to be.

Closing Thoughts

Getting mobile right is difficult, but doing so will transform the way people bank. Mobile apps and even websites can feed content and provide tools to users when needed, based on the environment and their actions. Today’s usages, such as immediate transaction notifications to protect against fraud, are just the beginning. Mobile device capabilities can ease pain points of self-service and build banks’ place in customers’ lives as the trusted advisor. It is incumbent on banking providers to define new roles and create new streams of revenue built around the mobile channel.

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