The top-3 most-used mobile apps include banking apps. 31 per cent of US adults use mobile banking products more often than other apps installed on their device - according to Citi. Only social media and weather apps win them over - with 51 per cent and 33 per cent correspondingly.
2019 Banking and Capital Market Outlook report by Deloitte states that more than ⅓ of banking and financial institutions began investing in technologies: open API, chatbots and AI, and big data analytics to improve their competitive market positions.
Let’s check out the technologies and ideas that have the potential to become Top Mobile Banking Trends this year.
1) Fast and simple banking
More banks will invest in improving their UI/UX and introduce a new experience of mobile payments. In 2020, almost 25 million of US households will be using mobile banking at their primary bank, according to Statista. Banks will Improve and simplify their experience in the time to come.
2) More voice banking
Ongoing excitement revolving around voice assistants, like Alexa or Siri, created another major trend in mobile banking: voice banking.
The statistics are promising: up to the current moment, 18 million US users carried out at least one voice payment, and the number is likely to increase by 4 times in the coming 5 years.
AI for Voice Banking is successfully implemented by Bank of America: the virtual assistant Erica is already helping 10 million users. It is able to send fraud alerts, subscription fee increase or double charges. It also assists in peer-to-peer (P2P) and bill payments.
By the way, Siri is partnering with Venmo to help users with P2P transfers, while Alexa has been supporting the payoff of Capital One bills by credit cards for almost 4 years already. Voice interaction with banks and fintech apps is no more a revolution: it is a trendy item on the roadmap 2020 for many banks, with a few of our customers. It introduces the ‘banking-on-the-go’ concept, makes online transactions easier and safer.
3) The expansion of open API
Open banking and financial ecosystems skyrocket the opportunities for banks and fintechs by enabling them to share user data with third-parties. Open API standard is going to build major marketplaces for financial and complementing services. In this situation, it’s up to the banks to decide whether to join or to orchestrate.
The financial ecosystem is a network of financial services accessible from a single integrated product chosen by the customer. The pros for consumers are obvious: it’s a more transparent view of finances, multiple payment methods, convenient access to related tools provided by different providers and even getting value-added services not directly related to finance.
For example, a B2C financial ecosystem is a centralised hub, which can offer deposits from bank A, loans from bank B, insurance from an insurance company or from bank C, personal finance management tool from a fintech company and a ride-hailing service from a third-party provider.
A B2B ecosystem can look like a platform offering electronic invoicing, automated factoring, loans for small and medium enterprises, e-commerce website templates - to name a few.
There are multiple examples of aspiring ecosystems in Europe and Asia, and we are sure it’s a major trend to follow.
4) Biometric identity for emphasised mobile security and easy onboarding
As far as security is concerned, many tech-oriented banks already included biometric verification on mobile as one of the authentication steps. Voice recognition technology works as good as fingerprint authentication. Customers will be able to search for transactions, transfer money or report stolen cards with the help of voice commands.
Another significant security aspect is the prevention of large-scale data breaches. The representatives of Starling Bank assume that mobile banking has a higher potential of becoming more secure than online banking. It happens due to multi-factor authentication and extra hardware-related levels of protection. It can be an additional advantage of mobile-only banks: in addition to improved security, it makes mobile banking simply more convenient.
Moreover, biometric identity has a high probability to completely replace passwords in the mid-term perspective and to enable fully digital onboarding for the unbanked or underbanked population in developing countries.
5) Card-free ATM withdrawals
Along with the further adoption of Apple Pay, Google Pay, and Samsung Pay, near-field communication technologies (NFC) and app-generated codes will reach the ATMs. More banks are going to enable their customers with an option to get cash by just using the mobile banking app.
At the present moment, more banks start working on app-generated QR codes for instant sign-in to save customers even more time.
Apart from obvious, card-free withdrawals can help minimise cloned card fraud: all the transactions are encrypted, so customer’s assets are highly likely to remain safe even if an ATM is tampered with.
6) More effective fraud detection due to Big Data
Along with the expansion of services and growing revenue, bank gets a higher security risk. You can take a took at the statistics on 2019 fraud losses incurred on credit cards in the UK alone to better understand the issue and the importance of fraud prevention. When taking into account the losses incurred by fraudulent activities in mobile banking, like identity theft, phishing or account takeover, the use of Big Data for its prevention seems a balanced way out.
Therefore, it is quite predictable that in the coming years, more banks and fintechs are going to leverage big data to identify weak spots and possible security threats in mobile and online banking.
By extracting, gathering and structuring vast pools of customer data, banks can build common patterns that will help to create predictive models of fraud detection that alert suspicious activity.
7) Debt management assistance
Easy access to credit cards and intense marketing activities of brands make it tough for customers to pay back on time. For example, in April 2019, the US consumer debt exceeded $14.07 trillion, according to the New York Federal Reserve
There are fintech products released in order to help people deal with their debts and control their spendings. Banks follow the trend: they offer helpful tools to win banking customer loyalty and help them get on track with the financial state. The feature can be built in a PFM tool and contain features like detailed spending reports, tracking accrued interests and the remaining debt and offering custom payoff strategies.
All those amounts in the concept of banks becoming major financial partners.
8) Focus on small and medium enterprises (SMEs)
Just like retail customers, who will experience more features and benefits of mobile banking in 2020, small businesses are going to get ready for more customised digital services from banks. Mobile banking for SMEs enables them to handle financial transactions, monitor their bank statements and be completely in control using mobile devices solely.
Banks tend to improve their UI/UX regularly, create omnichannel interaction with businesses, work on the security level, provide valuable content and expand the range of services.
6) Blockchain in banking
Despite the hype wave going down, banks and large fintechs are still major consumers of the technology. No wonder that according to the Accenture report, 90 per cent of bank executives are thinking of the possible blockchain use aimed at improving security. JP Morgan Chase, Bank of America and other large US banks are ready to use blockchain for better security, improved efficiency, and decreased costs.
Data transparency and fraud prevention are possible because of decentralisation, data immutability and asymmetric encryption are potent to shorten the transaction time, speed up the interbank settlements, and more.
More trends we have noticed:
- Smart bots and machine learning for instant customer assistance on mobile devices;
- In-app instant credit decisions (especially for micro-lending) - access to the deposit information and payroll payments help to extremely cut down the decision-making time, and approve credits in no time;
- P2P lending;
- Mobile-only banking;
- Augmented reality (for example, to show the nearest bank office or the ATM);
- Human digital banking (the use of AI to help one bank’s manager establish direct contact with thousands of customers via their mobile apps);
- Cloud-based fintech and banking apps.
Changes and digitalisation in the banking industry are slow yet steady. Despite the prevalence of manual processes and time-consuming procedures, the software development is moving at lightspeed, presenting lots of opportunities to pick up from.
Basic mobile banking apps are not enough: cherished by retailers, customers are willing to get effortless, end-to-end, and personalised banking experience, which is hardly possible without updates on digital banking trends.
Denis Novikov, Deputy Director of Business Development, Qulix Systems