Mobile Banking Trends: What’s Hot & What’s Not

More services are becoming must-haves to remain competitive in mobile banking. In the increasingly important category of apps to help consumers build savings and manage their money, lots of room for improvement remains.

Saying that this or that banking product or feature is “table stakes” misses the point. Anyone who knows poker realizes that you have to at least keep matching the current bet to stay in the game, or you fold.

Mobile banking is a good illustration of this. As more and more consumers rely on mobile banking, the need for improvement grows more critical — the stakes keep rising, in other words.

Minna Technologies came up with a list of 30 mobile banking features that could potentially be offered. It inventoried the apps of 24 leading multifunction banks, direct banks and a few newer players, such as Chime, Varo Bank and Marcus by Goldman Sachs.

The features were divided into five areas: payment and card, expense management, savings and investments, customer support, and security. Minna ranked providers in each category by a benchmark based on the number of features in that category that they provide. This was a quantitative evaluation of the firms’ “entire mobile banking solution set,” in Minna’s words.

Among the organizations examined by Minna, the total number of features offered ranged from a high of 24 out of 30 at Chase to half or less than half that number among providers like TD Bank (12), Bank of the West (12), Citizens Bank (11) and Bank of Hawaii (11). Among newer players, Chime offered 18, Varo Bank offered 14 and Marcus by Goldman Sachs offered 13.

(Remember, Minna’s is a quantitative analysis, not a rating of quality of an app. The numbers above are actual counts of features. Each of the three categories reported in the rest of this article had differing numbers of features, which Minna translated into a five-point scale for the sake of benchmarking. Other counts given concern actual number of features.)

In a separate qualitative study, Forrester considered the functionality and user experience of certain aspect of the mobile apps of seven major U.S. retail banks. They were Ally, Bank of America, Chase, Citi, USAA, U.S. Bank and Wells Fargo. All but USAA were included in the Minna study as well.

“Nearly half (49%) of U.S. online adults say they should be able to accomplish any financial task through a mobile device,” according to Forrester.

Taken together, the two studies give banks and credit unions a good yardstick for determining what features to consider adding next — and where their holes are.

Mobile App Features that Help Manage Money and Expenses

In a time of rising economic uncertainty and the highest rate of inflation seen in four decades, offering mobile banking tools that can help consumers squeeze the most out of their money is a priority. Forrester thinks banks are coming up short in financial tools provided through mobile banking apps.

“Overall, banks are doing too little to help customers understand their spending, create useful budgets, receive personalized insights, get proactive advice, track their financial health, and monitor their financial lives.”

— Forrester report

A J.D. Power survey of consumers who had recently moved their main accounts to a new primary bank found that 14% did so because the new institution provided more digital tools and 11% moved because the new bank offered tools that were easier to use.

Yet Minna’s inventory study of mobile banking services found that providers’ average benchmark on money and expense management features was only 2.6 out of 5, with Bank of America leading the category at 4. The highest among other banks were Chase, Citi, Truist and U.S. Bank at 3. Chime, which promotes itself as “banking that has your back,” had a benchmark of 2.5 in this area.

The ten services in this category include:

  • Creating budgets — Not offered by three out four providers reviewed..
  • Viewing spending insights and categories — Not offered by half of the sample..
  • Getting spending alerts and purchase notifications — Offered by most.
  • Viewing credit score — 9 out of 15 offered this.
  • Viewing recurring bills, subscriptions & memberships — Offered by four institutions.
  • Cancelling and blocking subscriptions and recurring payments — None offered this.
  • Switching utilities, telcos and other regular providers — None offered this.
  • Linking external bank accounts — Offered by eight providers.
  • Viewing statements and transactions — “Table stakes,” everybody does it.
  • Viewing account balances — Ditto.

Forrester’s report cites as a best practice USAA‘s giving each customer a “personalized financial plan” that includes specific actions to take. Part of this feature consists of periodic reminders of which steps have and haven’t been taken. The firm also spoke highly of Bank of America‘s virtual assistant, Erica. (Both studies were completed prior to March 2022, when USAA began rolling out a major upgrade of its app.)

Forrester’s report also suggests that apps must make it easy for people to make sense of their spending. For example, USAA and U.S. Bank give users multiple ways to search their transactions. The report notes that U.S. Bank’s app enables customers to pull up significant detail about each purchase, if they need it.

As noted, three out of four apps inventoried by Minna don’t even offer budgeting tools, which are a basic of many fintech apps.

For those who aren’t offering them now, it may not be that steep a climb. States Forrester: “Budgeting tools in mobile banking apps tend to fall into one of two categories: nonexistent or bad.”

Some institutions earned praise from Forrester. Both Bank of America and U.S. Bank prepopulate budget categories by pulling in past spending. This gives the user the opportunity to have a starting point they can make adjustments to. Forrester also liked Bank of America‘s “Life Plan” and U.S. Bank’s “Life Moments” tools. Both include specific advice as well as relevant product suggestions. U.S. Bank’s Life Moments covers events such as home buying, marrying, and starting a family. Bank of America’s Life Plan tool covers a somewhat broader variety of financial challenges.

BofA's Life Plan Growing Rapidly:

In a mid-2022 analyst meeting Brian Moynihan, CEO of Bank of America, said that approximately six million people use its Life Plan service. The bank hopes to push that to 30 million.

The industry has a way to go yet in terms of being seen as a source of app-based financial planning assistance. Personal finance sites like NerdWallet, Investopedia and Forbes Advisor still confine themselves to rating freestanding budget apps like YNAB (You Need A Budget), Goodbudget and Mint rather than those offered as part of mobile banking apps.

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Mobile App Help in Managing Savings and Investments

Tools to help consumers save and invest are also going to be critical in the times ahead. In this five-feature category Minna’s average benchmark for all 24 providers came in at 2.3, with the leader, Chase, coming in at a benchmark of 5 out of 5.

Following Chase are Ally, Bank of America, Citi and Marcus, all at a benchmark of 4. Somewhat surprisingly, brands noted for appealing to people needing to save came in with lower benchmarks, such as Chime (2) and Varo (3). In part some lower showings are because lending and investment tools were included in this section of Minna’s analysis, and some providers aren’t in that business.

Minna’s inventory in this category included five in-app services:

  • Creating savings goals — 14 companies out of the 24 offer this.
  • Setting up automated savings — Just under half of the apps do not provide for this.
  • Managing investments — Only 7 out of 24 offer this, in part due to not offering investment services.
  • Managing loans and mortgages — 9 in 24 provide for this.
  • Tracking cashback and rewards — 14 providers out of the 24 offer this.

Using Mobile Apps for Payment and Card Services

In this seven-feature category the average benchmark for all 24 providers was higher, at 3.5, with the leader, Citi, coming in at a benchmark of 5 out of 5, in Minna’s analysis. Immediately behind Citi there was a four-firm tie at 4.3 for Capital One, Chase, Chime and Regions.

Minna’s inventory in this category included seven in-app services:

  • Depositing checks — Virtually table stakes, with only two firms not providing mobile deposit.
  • Paying bills — Only two, Varo Bank and Marcus, don’t offer this.
  • Locking and unlocking cards — Most offer this security service.
  • Making mobile payments (examples Apple Pay, Google Pay) — All but American Express, Bank of Hawaii and Marcus enable this.
  • Transferring funds (example, via Zelle) — All but American Express enable this.
  • Creating disposable virtual cards — Remains a leading-edge service, with only Chime and Citi offering it.
  • Disputing credit card transactions — Only Chase, Citi and Regions provide this capability.

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