An estimated 70% of Indian online adults with a bank account do their banking on a mobile app or website using their smartphone, according to data by Forrester research. The Covid-19 pandemic has expedited the already-existing need for a completely digitised world and brought it to the centre stage.
For banks and NBFCs, the most prominent outcomes of this digital shift in banking are developing a sound mobile banking strategy as a part of digital banking initiatives to compete and survive post-Covid consumerism.
It is a ‘do or die’ situation for the FIs to quickly adopt a digital and mobile-ready outlook to empower their customers. Here are compelling reasons why mobile banking is a must for every FIs digital banking strategy today.
Mobile Banking: Why is it A Must for Digital Banking Strategy
Let us dig deep and understand the benefits of a mobile-first approach in banks and other FIs’ digital banking strategies:
Unparalleled availability
Unlike the limited working hours of a physical bank branch, mobile banking is available to users 24×7. In addition, there are no limitations to banking like it is in the case of visiting a bank branch for transactions.
Customers can access banking services whenever and wherever they need and expect to get the same services as legacy branches without any hiccups. Providing unparalleled availability of banking services at all times is a fantastic benefit of mobile banking at this time of social distancing and lockdowns.
For example, completing online purchases using mobile banking payments has become a commonplace requirement today. It is expected that mobile payment transaction users will exceed a billion by 2023, growing from 950 million users in 2019 to 1.3 billion.
Improved customer experience
There is tremendous competition amongst the different FIs today across business domians. For instance, they have to compete with the traditional banks and other FIs and keep an eye open for the up and coming equally-competitive fintech solutions.
In such a scenario, enhancing their customer experience is crucial to retaining them. Mobile banking is more convenient than traditional banking, as customers have the entire banking world right at their fingertips: no bank timings, no wait times.
Payments arrive and get deposited in real-time, and customers walk away with a positive experience, which only adds to their brand loyalty. Some important banking tasks that a customer can accomplish in much less time using mobile banking are:
- Exchanging currencies at market rates.
- Opening a new bank account.
- Locking or cancelling their debit or credit card.
- Withdrawing money from ATMs cardless-ly, anywhere globally.
- Buy financial products like credit and prepaid cards.
- Order chequebooks and replace debit cards.
- Create FDs and SIPs, among others.
Mobile banking, therefore, removes all barriers and hassles of visiting a physical branch and provides a straightforward solution to users via mobile screens.
Helps banks & FIs cut costs
Mobile banking is not only a godsend for its customers or end-users, but it is equally advantageous for the financial institutions that have jumped on the bandwagon.
Adopting a mobile banking strategy helps FIs cut costs tremendously. They can quickly curtail expenses for printing and delivery since mobile banking facilitates them to go completely paperless.
FIs can even choose to close down multiple physical branches and consequently downsize their hiring initiatives, saving on multiple expenditures in the process.
Since the widespread adoption of mobile banking decreases customer’s dependency on physical bank branches and ATMs, banks can turn to close unprofitable branches, which will only add to their operational profitability.
A report by BCG revealed that between the period of February and June 2020, mobile banking usage grew by 34% while banking at branches declined by 12%. This is enough cue for banks to roll out mobile banking strategies and witness their expenses reduce considerably.
FIs enjoy better ROI
Since all one needs is a smartphone and an internet connection to perform transactions through mobile banking, it allows banks to transcend geographical boundaries and expand their reach.
In addition, mobile banking will enable banks to up-sell and cross-sell other products to their existing customers since they are better engaged with the bank’s mobile app than a physical bank branch.
Not only this, banks can even enjoy a lower attrition rate by adopting a mobile banking strategy. This is because mobile banking users will generally stick to a bank much longer than their other counterparts.
A recent study on mobile banking users revealed that an average institution could generate close to $2 million in incremental revenues and reduce attrition by an average of more than 15%, simply by increasing the mobile banking adoption rate.
The study also found that an engaged mobile banking consumer:
- Will use more services.
- Decreases costs.
- Stays with the bank longer.
- Conducts more debit, credit, ATM transactions and much more.
Better security
Banks and FIs realise the need for a safe and secure environment to transact because they’re entrusted with the responsibility of dealing with their patron’s hard-earned money.
Mobile banking offers a much safer opportunity than its online counterpart in times of growing cyber-attacks and other cyber threats. FIs and banks can use passwords and two-factor authentication features to provide their customers safety while transacting online.
In addition, features such as biometrics, including fingerprints, retina scans, Face ID (trademarked) gesture patterns, etc., add an extra layer of security to mobile banking.
Customers are increasingly turning towards convenience as a lifestyle and mobile banking has proved to be highly convenient to their otherwise busy and stressful lives. Therefore, financial institutions need to address a full-fledged mobile banking strategy to survive in the cut-throat competitive banking landscape.
Finezza offers agile lending lifecycle management and intelligent credit evaluation services to banks and FIs. For more information on how Finezza can help digitise, contact us today.
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