Banking is boring…
We often hear commentators state that ‘banking is boring’.
In fact, over the past few years consumers are engaging much more with their banks. On average consumers in the UK interacted with their bank 3.5 times a month in 2016, up from 2.3 times a month in 2011 - a 60% increase1.
What’s driving this is a massive jump in the usage of mobile apps to access bank services. Over a 5-year period, mobile access to banking services has jumped an incredible 600% in the UK, and mobile is now the dominant channel for customers to access bank services.
Over the same period, branch access has declined 42% and telephone access has declined 14%.
… My money is fascinating
So, what’s behind this - why are customers interacting more, not less, with their banks? Let’s look at this from two angles: what banks are doing and what consumers are doing.
What banks are doing
Banks have almost universally added mobile apps to the set of channels customers can use to access their account. And most banks allow customers to store their credentials - their username and password - on the mobile phone, enabling customers to logon using biometrics like touch identification.
It is this step - making it easier for customers to identify themselves with their banks - that is at the heart of consumer adoption of the mobile channel.
We can see a general trend: visiting the branch counter meant queuing up; ATMs enabled easier access but still required customers to be physically at the bank; telephone banking allowed home access; and desktop internet banking meant customers didn’t have to speak to someone, further removing friction.
With mobile and biometrics enabling stored passwords, ease of use has improved - and customer usage has jumped. Ross McEwan, CEO of RBS, had this to say recently “Do you know what our busiest bank branch is in the UK? It’s our mobile app on the 7.15am train to Paddington.”2
What consumers are doing
So, banks have made it easier for customers to access their account. What are consumers doing with this access?
Firstly, the frequency of access by mobile active customers is impressive: The average user of Barclays mobile app logs into their app 28 times a month, close to once a day3. Other banks report similar levels of activity4.
So, what are consumers doing - are they making payments, opening new credit card accounts, amending direct debits? The reality is that most of these logons are customers simply checking their balance. Matt Hammerstein of Barclays puts it this way: “What we’ve seen is the preference many people have for wanting reliable updates on their financial position whenever and wherever they choose”5.
What’s my balance - a consumer fascination
The massive jump in accessing bank services is driven by a massive jump in customers wanting to check their balance. Given the frequency of checking balances - an almost daily activity - there seems to be a powerful human need that underlies this behaviour.
Implications: Dig into the underlying concerns
We know what consumers are doing - checking-in with their money - but not why they’re doing it.
Unpacking the underlying questions that consumers have about their money is a powerful direction of development for bank mobile apps - and should be at the heart of banks’ ‘test-and-learn’ approach to mobile development.
Ten underlying questions for banks to test:
| Consumer Question | Bank Capability to Test |
|---|---|
| 1. “Is my money still there?” | Daily / weekly balance notifications |
| 2. “Have I been paid? / Did that payment go through?” | Payment notifications |
| 3. “Am I going to be charged overdraft fees?” | Fee alerts, options to avoid fees |
| 4. “Will I get to the next payday without going overdrawn?” | Balance after bills forecasting |
| 5. “Can I afford to buy…?” | Total funds available: balance + overdraft + loan options |
| 6. “Can I save more?” | Safe-to-save balance, automatic daily savings, spend round-ups |
| 7. “Should I invest more?” | ‘People-like-me’ investment levels, simple fund selectors |
| 8. “How much is my partner / child spending?” | Spend controls, supplementary account limits |
| 9. “Where does all my money go?” | Spend categorisation, month-over-month comparisons and limits |
| 10. “Will my purchase be approved when I’m travelling?” | Travel / overseas alerts |
Wrap Up
Now banks have made it easy for customers to access their account on mobile we have seen a dramatic uplift in consumers simply checking-in with their money.
The frequency of check-in - almost daily - is incredibly high and comparable to consumer access to very popular services like news, sports, and social media.
So, while consumers may hate their banks, what’s clear is that they are fascinated by their money. And there is a lot that banks can do to make managing their money easier.
Notes
- Data is from CACI link
- Quote from BBA ‘The Way We Bank Now: It’s in your hands’ 2014 report
- Data from BBA ‘The Way We Bank Now: World of change’ 2015 report
- For example, TSB reported in July 2015 ‘the average person logs on up to five times per week’ link
- Quote from BBA ‘The Way We Bank Now: World of change’ 2015 report