Mobile banking has become a normal way of carrying out financial transactions. Not surprisingly, the use of mobile banking apps varies considerably between age groups. While 64–74% of Gen Z (18–24 years old) and up to 80% of millennials (27–42 years old) use mobile banking as their primary method for managing finances, baby boomers (60+ years old) lag behind. Their share is as low as 30–35%.
Gen Z and millennials may be considered digital natives, who have grown up in the era of fast technological advancements. Baby boomers, however, generally require some assistance and encouragement to try new ways of banking.
What if, as a financial service provider, you were able to cater to the needs of all these age groups, thus driving mobile banking growth?
In this blog post, we will present the benefits of mobile banking apps for both financial service providers and customers, the key factors that make a top-notch banking app, as well as insights into why mobile banking app development is a strategic decision.
Here’s why a well-designed mobile banking app not only makes customers happy but the investment also pays off for the bank:
Regardless of the targeted age groups, a mobile banking app provides the following benefits:
Since 9 out of 10 people carry their smartphone with them at all times, a mobile app is the ultimate shortcut to their bank.
Apps are made for smartphones. If implemented natively, they will convince with a better performance and user experience. Another major benefit is security: A mobile app depends on the user’s permission to perform an action. In addition, it can be protected from malicious actors like viruses, which might be snoozing on the device and listening to input. If needed, an app can work even offline – a welcome benefit when in a tunnel or particularly crowded area.
Mobile apps have become the most important touchpoint in customer relations for banks. Features and user experience are key differentiators for a customer’s decision to open an account, stay with a provider, or move on.
However, mobile app maturity differs significantly between banks. There are basically three main scenarios:
No matter whether a mobile banking app is rudimentary, outdated, or highly developed but flawed, it is a strategic investment. For this investment to pay off, a few key factors have to be considered.
Since the 1990ies, we have come a long way from SMS banking to mobile internet platforms and finally mobile banking apps with the emergence of smartphones. With technological advancements, user expectations, security as well as growth potential have significantly increased – all key factors that make a successful mobile banking app if addressed appropriately.
To make the user experience for customers as pleasant as possible, modern mobile app design should focus on the following principles:
Simple (avoid clutter, use language and patterns everyone can understand), efficient (avoid unnecessary steps, make use of features to save time, e.g., biometric authentication or autofill of forms), context-aware (adapt functionality, content, and aesthetics based on location and time of day), accessible (make the app accessible to everyone, including all age groups and users with disabilities), consistent (use a consistent design language, rule sets, and follow platform guidelines and screen reader systems from iOS and Android).
Given the sensitive nature of the banking business, a mobile banking app should in addition focus on the following principles:
The next step on a bank’s path to customer growth is to provide an app that customers across generations trust and enjoy using. But how is it possible to meet the varying needs of all age groups?
For younger customers, features like intuitive navigation, sleek design, and modern communication channels such as chat create engagement. More traditional customers will be looking for reassurance through direct contact to an RM, personalized financial insights, security, and easy-to-follow processes. Overwhelming options need to be avoided.
While there’s generally common ground for aspects like design and security, there can be a big difference in functionality.
The key to a broadly accepted app is thus a modular, user-centric design that allows different users to access the level of complexity they need – while always feeling in control. For example, the app might offer a home screen with smart default settings (e.g., a QR-code scanner for invoices), which is easy to customize. This creates an inclusive experience that respects the needs of digital natives and banking traditionalists alike.
Going forward, it will be crucial to design apps in such a way that they can be tailored to specific customer characteristics, such as age group, via settings or AI.
Fortunately, gone are the days of slow paper-based onboarding, card readers, and cognitive load through passwords that made e-banking a struggle for many customers.
Thanks to technological advancements, more user-friendly and at the same time more secure authentication options are available, especially for mobile banking apps. The art lies in finding the right balance between security and usability. While a threat matrix helps understand the likelihood of a potential vulnerability and its impact, there is no one-size-fits-all solution to this problem.
Since an app is only as secure as its weakest link, it has to be carefully decided what security risks can be taken to optimize user experience. In the end, it is always a trade-off between business opportunities and security.
A mobile app is a bank’s gateway to their customers, a place where relationships start, confidence is established – and revenue is generated. After all, mobile banking is the new normal for customers across age groups, it provides a high level of security, is efficient and personalized. In other words: Mobile banking is a strategic growth driver, shaping the bank’s future.
Therefore, the question is not «Shall we invest in a new app?» but «How will our business develop if we don’t?».
Another factor not to be neglected are regulatory requirements. They differ depending on the location of the service provider and impact the software architecture from the very start. Common questions are: What kind of end-to-end encryption do we need? What needs to be end-to-end encrypted? What data has to and/or cannot be handled/stored by a user?
As the app architecture might vary significantly due to regulatory requirements, it is important to make sure that the app is adaptable to the target locations.
As Gen Z and millennial customers grow up, start a family, open a business, or inherit money, their banking needs increase. Banking via mobile app will thus become even more important. In addition, this trend is likely to accelerate in view of the increasing cyber risks online banking customers are facing.
Therefore, banks should strategically upgrade their mobile apps now to get ready for the future of large-scale «smartphone banking».
The potential is significant: attract customers of the younger generations, take the relationship with existing customers to the next level, increase efficiency and, consequently, revenues.
All of this becomes possible for one reason: your customers benefit from an unprecedented personalized, convenient, and secure banking relationship. A state-of-the-art mobile app is more than just a tool that provides financial information – it’s a personalized advisor for the customer and a key channel for the RM to drive growth.
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