What is mobile banking?

Digitalization has taken over the banking industry. Smart devices have made banking on the go a seamless and easy process. 

With the introduction of fintechs and other financial institutions that run on rapidly growing technology, traditional banks have been forced to adapt to new trends and demand. 

Mobile banking has made its mark and has become the preferred method of banking for most consumers. Read on to learn more about what mobile banking is, its benefits, and how we expect it to evolve in the years to come. 

Mobile banking is a form of online banking that enables consumers to complete transactions on a mobile device – either through a mobile website or app. 

Consumers use mobile banking for various activities, including: 

It’s become a fast, easy-to-use alternative to visiting a branch or calling a call center – and its popularity has increased in parallel to smartphone adoption.

Online and mobile banking are two terms that can often be confused as interchangeable. However, there are some key factors that differentiate one from the other. 

Online banking refers to conducting banking transactions and activities via the internet, regardless of the device or channel used. Online banking can be done via a bank’s website, mobile app, or any other channel a financial institution makes itself available to customers. 

Mobile banking, on the other hand, is a subset of online banking. It refers to customers conducting banking activities exclusively through a financial institution’s mobile app or mobile website. It does not refer to banking activities done on any other device, such as a laptop. 

It’s no surprise that mobile banking has become the preferred method for many consumers today. Its benefits are many for both financial institutions and their clients. Here are a handful of reasons mobile banking has become the go-to option for daily transactions and activities:

Mobile banking alternatives are notorious for speeding up mundane, tedious processes such as sign ups, onboarding, and training. Solutions such as silent mobile verification make it easy for customers to set up their bank accounts and onboard to their new bank with authentication that is done in less than five seconds without having to leave the app – increasing security and customer satisfaction.

Eliminating long queues in branches to conduct quick transactions not only benefits the customer but bank tellers as well. Setting up mobile banking is cost-effective for financial institutions since they require less administrative resources and can let in-branch and contact center employees handle more challenging inquiries. Customers, on the other hand, receive a self-service model that enables them to complete their transactions in the time and place that’s most convenient for them. 

Some consumers are skeptical about the security of mobile banking transactions. However, advancements in technology have led to rewarding two-factor authentication and biometric identification solutions that prevent identity theft and financial fraud. Having on-the-go access to their bank account also enables consumers to lock or deactivate cards that they’ve misplaced or that have been stolen.

Improving customer experience has become a priority for many financial institutions today. Offering round-the-clock access to bank accounts, on-the-go account management, and a myriad of activities such as splitting bills, depositing checks, and sending international money transfers all from one place gives banks the opportunity to exceed customer expectations.

Setting up a mobile banking app is the first step. But how can you use the app to its full advantage? Combining your mobile app with reliable, secure communication channels such as SMS can help you remain a market leader. 

Here are a few ideas:

People like to know when important payments have reached their destination safely – or when a payment they’re expecting has landed in their own account. Think rent or regular household bills. A proactive SMS alert gives them peace of mind.

If a payment looks like it could be fraudulent (based on factors like the amount, timing, or location) any bank would want to double check with the customer ­– without causing them inconvenience. Payment authentication messages do this easily, even when your customers are abroad or out of data and WiFi range.

When someone’s in the process of getting a mortgage or making an insurance claim, they want to be kept informed. Automated status updates let them know when certain milestones have been reached – so they don’t have to waste time calling up your service center.

Whether it’s a loan application or a new banking product, getting a customer set up can be complicated. With SMS, you can enter a simple, two-way interaction that takes them through the process without those complex forms.

When it’s time to renew a policy or make a payment, a simple SMS gets their attention. From there, you can send them to a simple renewals or payments page – no more missed deadlines.

Need to check a customer is who they say they are? Unique authentication codes and one-time passwords are an easy, secure way to grant them access.

Motivating customers to give you feedback can be tough. Mobile messaging cuts the barriers dramatically. After a customer interaction, send them a simple survey instantly. If they’re not happy with your service, it’s a great way to capture that feedback and address it­ – before they head to Twitter or a review site.

When a customer’s personal details aren’t kept up to date, it causes headaches for everyone. Make it easy for them to keep you informed with automated messages and simple instructions.

SMS promotions can help you convert prospects into new customers, and new customers into loyal ones. But you can also use it to reward your long-term customers with discounts and incentives. Try offering special rates to your long-term customers, so they never get itchy feet.

Banks have plenty of data on their customers. If they use it right, they can send personalized, timely offers that their customers actually want to receive. Got a customer who’s just opened up a junior savings account? Send them a message with educational materials about your college savings plans. Make it easy for them to start that conversation with you.

Mobile banking is just the beginning of a digital banking future. Financial institutions have been pushed to digitally transform their customer experience to meet demand and stay competitive. This is why we’ll see mobile banking evolve into conversational banking experiences that take place in the channels customers prefer – and not just within a single app.  

Here are a few mobile banking trends and innovations we’ve seen take shape in recent months and can expect to see evolve for years to come:

AI-powered chatbots on channels such as WhatsApp, Live Chat, and Viber will give customers one-on-one automated conversations to help them resolve their queries – offloading frequently asked questions and common queries from your contact center. Through machine learning, these chatbots will get to know your customers more over time, enabling them and your agents to personalize future interactions. 

Whether customers prefer to use a mobile banking app, chat with their bank on WhatsApp, or receive real-time notifications via SMS – financial institutions that implement omnichannel communication can see riveting results. Being present on customers’ favorite channels and enabling them to continue conversations and activities from one channel to another will make for a smooth experience that increases loyalty and retention. 

Messaging apps including WhatsApp, Viber, and Apple Messages for Business make implementing conversational banking easy. With real-time, one-on-one, two-way communication, customers can complete their regular banking activities on the channels they use with family and friends. Leveraging the rich media features these channels offer also makes these interactions quick and engaging – taking mobile banking experiences to a new level. 

It’s never too late to build the foundation for a digital-based future. If you haven’t implemented mobile banking options for your customers, now is the time to get started.  

Building a strong foundation will make it easier to expand the digital banking options you offer customers in the future with developed technology such as chatbots, new channels, and cloud technology. 

Learn more about the latest banking trends and find out how other financial institutions are developing their own CX strategies: