Mobile Banking Apps Are All the Same — But Customers Want New Features

  • Posted by: Kenneth Ogada
  • Category: Blog

Mobile Banking has become an integral part of our daily lives and has transformed the way we manage our finances. With the increasing use of smartphones and other mobile devices, traditional banking methods have become outdated and inconvenient. Consumers demand more efficient and personalized mobile banking services, and financial institutions are investing heavily in developing innovative features and technologies to stay competitive. However, while the mobile banking market is flooded with various options, customers are still searching for new and improved features that differentiate one app from the other. This article examines why consumers are clamoring for new features and explores the current and future state of mobile banking apps.

What is Mobile Banking?

Mobile banking

Mobile banking refers to the use of a mobile device, such as a smartphone or tablet, to perform various banking activities and transactions remotely. It enables customers to access and manage their financial accounts, conduct transactions, etc., and avails banking services through a dedicated mobile banking application or a mobile-optimized website provided by their respective banks or financial institutions.

The banking app offers a convenient and accessible way for individuals and businesses to engage in banking activities. They do not need to visit a physical bank branch. Users exercise the flexibility to perform banking tasks at their own convenience, 24/7, from anywhere with an internet or mobile network connection.

The Current State of Mobile Banking in Kenya

1. Market Penetration, Usage, and Innovation Statistics

The adoption of mobile banking in Kenya has been remarkable. A customer satisfaction survey by the Kenya Bankers Association (KBA) found that mobile banking was the most preferred channel in 2021 at 58.4 percent, up from 52 percent the year before. This demonstrates the growing popularity and acceptance of banking apps as a primary means of financial management.

96 % of the sampled institutions (38 commercial banks, 1 mortgage finance institution, and 14 microfinance banks) have adopted or developed a mobile banking solution (app or USSD) to assist in the administration of banking and customer relationship services. Only two (2) institutions (1 bank and 1 MFB) have not adopted or developed a mobile banking solution (app or USSD).

Banking Sector Innovation Survey 2022

The report highlights key areas of innovation, such as Loan application, Credit appraisal, Credit approval, Disbursement, and Repayment processes. Consequently, 89% of the financial institutions have adopted APIs. This is followed by Big Data and Data Analytics, Bio-metrics Technology, and Cloud Computing at 57%, 51%, and 47%, respectively, across all the financial institutions.

A key takeaway from this report is that the sampled institutions consider payments, Credit, deposit, and capital-raising services the most important to innovate.

The Current State of Mobile Banking Apps

Most of the major financial institutions in Kenya have their own dedicated mobile banking apps. Moreover, fintech startups in the market are competing with traditional banks to offer innovative and user-friendly mobile banking apps.

But with advancements in technology, many of these apps now provide a range of functionalities that enhance the overall banking experience of customers. Some of the common services that most of these mobile banking apps offer include:

  • Account opening
  • Card management: balance inquiry, generating account mini-statements, and stop payment orders
  • Funds Transfer
  • Transfer from or to a mobile wallet
  • Bill Payments: Mobile banking apps enable users to pay bills directly from their smartphones, eliminating the need for manual transactions.
  • Mobile Deposits: Customers can deposit checks remotely by capturing images of the check using their mobile devices, saving them a trip to the bank.
  • Mobile Credit Products

While these features have undoubtedly improved the banking experience, customers are now seeking new and innovative functionalities to stay ahead in the competitive mobile banking landscape.

Why are Consumers Looking for New Features?mobile banking

Consumers are looking for new mobile banking features due to a variety of reasons driven by their changing expectations, technological advancements, and evolving needs. Here are some key factors contributing to the demand for new mobile banking features:

i. Changing Consumer Behaviors and Expectations

Consumers are becoming increasingly tech-savvy and demanding more from their mobile banking apps. They expect fast, easy, and convenient access to their financial information and transactions. They also want their apps to offer personalized experiences that cater to their individual needs and preferences.

ii. Convenience and Accessibility

As technology continues to advance, consumers expect banking services to be accessible anytime and anywhere. They desire features that provide convenience, such as mobile banking apps that allow them to perform transactions, manage their finances, and access account information on-the-go, without the need to visit physical bank branches.

iii. Enhanced Security

With the rise in cyber threats and data breaches, consumers prioritize security when it comes to their financial transactions. They look for new banking features that incorporate robust security measures, such as biometric authentication, two-factor authentication, and device authorization, to ensure the protection of their sensitive information and prevent unauthorized access to their accounts.

iv. Evolving Digital Lifestyles

Consumers’ lifestyles have become increasingly digital-centric. They rely on smartphones and other mobile devices for various activities, including financial management. Consequently, they seek banking features that seamlessly integrate with their digital lifestyles, providing a unified experience across platforms and devices.

v. Seamless Digital Payment Experiences

With the rise of digital payment methods and the increasing popularity of contactless transactions, consumers expect their banking features to support seamless integration with digital wallets and provide smooth experiences for making mobile payments. They desire the ability to manage their debit and credit cards within the banking app, link them to digital wallets, and easily initiate transactions.

vi. Integration with Emerging Technologies

Consumers are eager to leverage the benefits of emerging technologies in their banking experiences. They seek features that integrate with technologies like artificial intelligence (AI), machine learning (ML), and natural language processing (NLP). These technologies can enable personalized recommendations, chatbot assistance, and predictive insights, enhancing the overall banking experience.

vii. Competition from Fintech Startups

Fintech startups are disrupting the traditional banking industry by offering innovative and user-friendly mobile banking apps. These startups are driving demand for new features and capabilities, and traditional banks and financial institutions are feeling the pressure to keep up.

Essential Features of Mobile Banking Apps

a. Account Information, Transfers, and Bill Payments

Basic features like account information, transfers, and bill payments are essential for any mobile banking app. Users expect these functions to be fast and easy to use.

b. Enhanced Security and Fraud Protection Measures

With the rise in cyber threats, customers prioritize security when it comes to their financial transactions. They expect robust security measures such as:

  1. Bio-metric Authentication: Customers appreciate the convenience and added security of biometric authentication methods like fingerprint or facial recognition. These technologies provide a seamless and secure way to access their accounts.
  2. Two-Factor Authentication (2FA): Implementing 2FA adds an extra layer of security by requiring users to verify their identities through an additional factor, such as a unique code sent to their mobile device.
  3. Device Authorization: Allowing users to register and authorize specific devices for mobile banking access helps prevent unauthorized access and enhances security.

c. Personalized Financial Management

Customers are looking for mobile banking apps that offer personalized financial management tools and insights. These features include:

  • Spending Analytics: Providing users with detailed breakdowns of their spending habits, categorizing expenses, and offering visual representations of their financial activities
  • Budgeting Tools: Enabling users to set budget limits, track their expenses against predefined categories, and receive alerts when they exceed their budgets
  • Financial Goal Setting: Allowing users to set financial goals, such as saving for a vacation or a down payment, and providing tools to track their progress towards achieving those goals

d. Seamless Integration with Digital Wallets

The popularity of digital wallet services continues to rise, and customers expect their mobile banking apps to seamlessly integrate with these platforms. Key integration features include:

  1. Mobile Payments: Enabling customers to make payments directly from their mobile banking app using popular digital wallets like Paypal, Pesapal, or Mpesa
  2. Card Management: Allowing users to add, manage, and link their debit and credit cards to their digital wallets within the mobile banking app

e. Intelligent Alerts and Notifications

Customers appreciate timely and relevant information about their accounts. Mobile banking apps should provide:

  1. Transaction Alerts: Sending real-time notifications for account transactions, ensuring customers are promptly informed about any activity on their accounts.
  2. Account Balance Notifications: Providing alerts when balances fall below a specific threshold, helping users manage their finances effectively.
  3. Payment Due Reminders: Sending reminders for upcoming bill payments, avoiding late fees or missed payments.

Impact of New Features on Customer Experience

New features can have a significant impact on the customer experience, thus helping financial institutions to differentiate themselves from their competitors. Here are some of the ways that new features can impact the customer experience:

  • Improved Convenience and Accessibility

New and enhanced features such as mobile check deposit can make banking more convenient and accessible for customers. This can lead to increased customer satisfaction and loyalty.

  • Enhanced Security and Trust

New security features such as bio-metric authentication and real-time fraud detection can help improve customer trust and confidence in the banking system.

  • Personalized and Relevant Services

New features such as personalized financial advice and targeted marketing can help financial institutions offer more tailored and relevant services to their customers.

Let’s Face it, Not Every Financial Institution is a Tech Guru.

While mobile banking has become increasingly popular and prevalent, some financial institutions still struggle with providing basic features that don’t even meet customers’ expectations. Here are a few reasons this can happen:

i. Outdated Technology

Some financial institutions may be using outdated technology platforms or legacy systems that limit their ability to deliver modern and user-friendly mobile banking features. These systems may not be designed to handle the complexity and demands of today’s mobile banking environment, leading to subpar functionality and user experience.

ii. Lack of Integration

Financial institutions often have multiple systems and applications that may not be fully integrated. This can result in fragmented mobile banking experiences where customers cannot seamlessly access all their banking services or perform certain actions through the app. For example, customers may need to use separate apps for different services like payments, investments, or loans, which can be inconvenient and frustrating.

iii. Inconsistent User Experience

Financial institutions with a multi-channel presence, including branches, websites, and mobile apps, sometimes struggle to provide a consistent user experience across these platforms. Customers expect a seamless transition between channels, but disjointed interfaces, inconsistent information, or varying functionalities can undermine their trust and satisfaction.

iv. Limited Functionality

Some financial institutions may offer mobile banking apps with limited features and capabilities compared to their web-based platforms or traditional banking services. Customers may expect to perform a wide range of banking tasks through mobile apps, including account management, bill payments, fund transfers, and access to additional financial services. If these features are lacking or poorly implemented, customers may feel frustrated and dissatisfied.

v. Security Concerns

Security is a critical aspect of mobile banking. However, some financial institutions may overly prioritize security at the expense of user experience. Excessive security measures such as cumbersome authentication processes or frequent login requirements can frustrate customers and discourage them from using the mobile app regularly. Striking the right balance between security and usability is essential.

vi. Inadequate Customer Support

Customers may encounter issues or have questions while using the app, and responsive customer support is crucial in such cases. Financial institutions that fail to provide timely and effective customer support within the mobile banking app can leave users feeling stranded and dissatisfied.

vii. Insufficient Innovation

The rapid advancement of technology and changing customer expectations require financial institutions to continuously innovate and enhance their app offerings. Those that don’t invest in research and development or fail to keep up with emerging trends may lag behind their competitors. In turn, they may struggle to meet customer expectations for modern features and functionalities.

By addressing these issues, financial institutions can provide banking experiences that align with customer expectations, enhance satisfaction, and meet the demands of today’s digital-savvy consumers.

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