Best, the enemy of better in mobile banking

Written by Dave Wallace
22nd July 2022

Banking industry, high fives all around.

Bringing hyper-personalised content to customers seems to really work

You have actually delivered solutions that customers use and love. Every month in the UK, millions of people log into mobile banking.

As of June 2022, the traditional banks accounted for more than 30 million active users and the neobanks around 10 million.

People feel comfortable with the services and seamlessly move between apps and banks as they manage their day-to-day finances.

In fact, many people have become very sophisticated and adept at finance in a way that simply would not be possible if their bank was not on their phone.

Take, for instance, a very good friend of mine. A single mum with three kids who juggles work and family and frankly does an incredible job with both.

I was chatting to her about future finances. She was pretty clueless about investments and pensions. It would be easy to write her off as a finance beginner. However, she then started talking about how she manages her day-to-day finances and how they are all managed through her mobile phone. Mobile banking makes it easy for her to balance the books day-to-day. It gives her control.

She also spoke about how her children are her priority in life. About how, from the moment they had arrived on the scene, she had focused on making sure they had money available to them in early adult life to give them a helping hand. She had always prioritised saving for THEIR futures at the cost of not thinking about her future finances (insight klaxon alert).

What was fascinating was her descriptions of how she educated her children about money and finances and how she used mobile banking apps to do that. For example, she had set up a NatWest Rooster account for her son and was able to manage that, including permissioning.

She recently set up a Monzo account, welcoming him to the adult banking world.

So rather than being a finance beginner, she is a day-to-day spending pro and demonstrates a very sophisticated approach to managing downwards, i.e., setting permissions.

In other research I have carried out at my “kitchen table”, Monzo crops up repeatedly. But in all cases, I found that Monzo customers have kept their existing “legacy” relationship and use Monzo for day-to-day spending.

In reality, what has been fixed is making transactional banking better and more accessible through the mobile. The tools to manage are there. If people feel that their bank doesn’t deliver what they need functionally or experientially, they find one that does. They download an app, open an account and sweep money in from their primary account. But that doesn’t mean closing their existing relationship.

So, if you are a bank, how do you capture what is going on and make sense of it? Take the Monzo vs traditional banks example. “Active users” is often cited as a critical measure by the banks. However, this hides the fact that Monzo sees more activity across the month than legacy banks. A much better measure is “retention”, i.e., how often a service is used after the app has been downloaded. The average phone has 80 apps, of which only nine are used daily and 30 monthly, so the road to app success is littered with unused ones.

Getting customers to use a service more frequently should be an aspiration for most banks. Based on what I have seen in my research, I think Monzo might be the best performer on that measure.

Revolut occasionally crops up in my discussions, but people seem to associate Revolut more with foreign exchange and crypto. This has made me wonder about their retention levels as the crypto winter has set in. Are they more associated with crypto, therefore, not used as frequently?

Going back to my friend’s experience, she has a massive gap in her knowledge and understanding and needs help beyond the day-to-day. How is her bank addressing that? It seems it is not. Again, this is a theme. Banks are acing money in the here and now but struggling with how to support their customers in other ways.

I believe this is the next wave of innovation and invention that will start appearing in digital banking solutions. I recently saw Personetics present with Santander at the Finovate conference in London. Personetics is being used to drive hyper-personalised insights for customers of Santander via their Money Manager proposition. According to Santander, this has driven not only engagement but also NPS.

Bringing hyper-personalised content to customers seems to really work.

So how do you start?

Be customer focused

This first step is vital. The business must agree that it wants to get closer to its customers and build that bridge with them. Without making customers a genuine priority, it is probably not worth the investment of getting it right.

Have a data strategy

Banks will need to look at customer data and question how they can make more out of it, perhaps augment internal data with third parties to turn it into an offering with real insight for that customer.

Think content

The new frontier is about matching content with intent and behaviour for banks. Rather than relying on banner adverts which nobody sees.

Banks should consider introducing content on their digital banking platforms in formats customers are familiar with, e.g., on TikTok, Facebook or Instagram. This means proactively producing engaging videos, podcast snippets/links, dynamic tools and wizards that take people through the bank’s product journey in a very gentle way, personalised from their data.

Test and learn

In all this, banks will need to set rules, test, learn and eventually get an accurate picture that shows when customers are most likely to engage with them in a relationship that goes beyond transactional.

Setting up a test and learn framework allows a bank to test hypotheses based on combinations of content, timing, repetition and so on.

Nowadays, bankers see technology as the most significant piece of the digital transformation puzzle, around which everything else fits.

However, banks need a mind shift – think 30% technology and 30% operations rather than 90% technology and 10% everything else.

There is so much space for improvement. Banks and fintechs have led the way in creating digital experiences people can use. The challenge for the industry is how to go beyond what they have and deliver platforms beyond the transactional.

About the author

Dave Wallace is a user experience and marketing professional who has spent the last 25 years helping financial services companies design, launch and evolve digital customer experiences.