7 mobile app features that will be essential to bank customers

July 22, 2022 2:58 PM

The spike in mobile app usage during the pandemic isn’t news. But the degree to which customers consider mobile banking essential has intensified.

“The share of people in the U.S. and in all markets who won’t tolerate having to go online is growing,” said Peter Wannemacher, principal analyst at Forrester. In other words, many customers are frustrated when they are forced to log onto the bank’s website to complete a task because the option is not there on the app.

Bank customers are increasingly performing transactions on their institutions’ apps, rather than passively checking them for information. Fifty-four percent of U.S. adults with bank accounts feel they should be able to accomplish any financial task through a mobile device, according to Forrester’s 2022 Mobile Banking Survey — an opinion that reached a majority during Forrester’s surveys for the first time in 2020. As mobile becomes the hub of people’s relationship with their financial institutions, it is more incumbent upon banks to embellish their apps with tools consumers want, beyond the basics of reviewing transactions and depositing checks.

Mike Welsh, chief creative officer at Mobiquity, a consulting firm that focuses on digital products, has also seen consumers increase their focus on apps.

“You’re seeing a much richer expectation that consumers have of mobile banking,” he said. “They are looking for an instant ‘get in and start banking’ whether it’s taking out loans, getting paid if they are an Uber driver or using alternate forms of currency such as crypto.”

In a recent report, Forrester identified seven features that are in light use now among U.S. mobile banking apps, but the authors, including Wannemacher, expect to be “indispensable” by 2025. Having such features that go beyond traditional standard functionality such as remote check deposit and the ability to transfer money is important because they will further engage customers, rather than simply retain them.

“Deepening relationships and being seen as [a bank] that someone wants to work with, rather than just continuing to work with — that difference is important,” said Wannemacher. More than half of respondents to Forrester’s Mobile Banking Survey 2022 believe their primary bank’s mobile app is about the same as others, rather than superior. Another 10% think it’s worse.

Payment for goods through a bank terminal in a contactless way using a smartphone (apple pay). Flower show in the store.

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Virtual cards and digital wallets

People expect a panoply of features to be available in their bank apps, even if they don’t plan to use them regularly. “The idea is not, ‘I am going to do everything through mobile’ but, ‘If I want to do it through mobile you should be making it convenient for me to do so,' ” Wannemacher said. In other words, people won’t necessarily do all their banking in the app, but they expect that any bank-related task should be possible in that channel.

Some features in a mobile app are replicated just as well on the bank’s website. But a couple of Forrester’s seven indispensable features are superior in app form. A prime example is digital wallet integration, where the bank lets its customers integrate their debit or credit cards directly into a digital wallet without leaving the bank’s app. Wannemacher points to Bank of America as a model of this functionality, where users are prompted to add their card to a third-party wallet right after they activate it.

Another is the ability to instantly issue virtual cards, which could come in handy if a customer loses their physical card and wants a stopgap before the replacement arrives. U.S. Bancorp has built some form of this — its Instant Card feature lets managers extend temporary use of a virtual commercial card to employees, contractors and others. These cards may be pushed to a mobile wallet.

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Smarter loyalty points and rewards

The top feature that Forrester respondents deemed “useful” or “very useful” in their bank apps is access to points and rewards, with 58% of respondents ranking the feature this way.

“Loyalty and rewards are huge, but there is clear evidence of some fatigue on the part of consumers, so [the idea] isn't just to throw more rewards and points at them, but to make it easier to utilize the rewards and points that you're already getting,” said Wannemacher.

One example could be the ability to pay with points at checkout. Discover Financial Services does this by letting customers use their points to pay for purchases on Amazon.com and PayPal.com via the Discover app. Wannemacher also envisions the potential for bank apps to analyze the user’s location and indicate where they can get a perk or discount nearby.

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More data

Another useful feature in the eyes of respondents is account data management, where users can see how their financial data is linked to other devices and third parties. Fifty-six percent of respondents found it “useful” or “very useful.”

“Five years ago, no bank in the world had high-quality customer-facing data management capabilities on their mobile app,” said Wannemacher. Now, there are several doing it well, he says. He cites Bank of America, Capital One and JPMorgan Chase as examples of banks that let customers not only glimpse where their data is being used, but adjust the ways it is shared. For example, Chase’s security center lists the places where users have stored their cards, devices that have access to their accounts, apps and websites that can access their account. They can revoke access to linked apps and websites on the spot.

Wannemacher said this is the fastest-growing of all seven features in terms of going from something most people did not understand to a feature people realized was important.

Another key is account aggregation, where customers can see financial accounts from different providers in one spot. “The concept has been around forever,” said Wannemacher, “but there are a lot of banks that are still wary of this.” Banks can also parlay account aggregation features into personalized advice and proactive alerts.

Subscription tracking

This is another feature that could be superior on a mobile device. “There is something about getting a push notification that says, ‘In 24 hours you will move from a free trial of Netflix to paying for Netflix. Click one button and we will cancel,’ ” Wannemacher said. “This could happen through email but that immediacy and context is an added value.”

He doesn’t currently see banks capitalizing on these opportunities to the extent he describes. Instead, apps such as Truebill — which will soon change its name to Rocket Money — and Emma, which is headquartered in London, do.

Some banks offer a form of subscription management, however. Huntington Bancshares has Heads Up, which monitors subscription transactions and sends alerts when a free trial will end or a subscription is coming up for renewal.Wells Fargo’s app lists merchants with recurring transactions. Bank of America’s Erica watches for recurring charges and increases.

Effortless saving

Several major banks offer automated savings functionality but the feature is not available in the majority of bank apps, said Wannemacher.

At the same time, more than a quarter of U.S. banking customers expect their bank to help them save money, and more than half say a savings tool on the app would be useful, according to Forrester data.

Some prime examples are Ally Financial’s Surprise Savings, Huntington Bancshares’ Money Scout and U.S. Bancorp’s Pay Yourself First. Pay Yourself First, for example, uses algorithms to gauge the amounts of money that customers can tuck away while still being able to pay their bills and address emergencies.

At the same time, challenger banks such as Digit and Qapital are better known for automated savings programs that incorporate algorithms and, sometimes, quirky rules. Automated savings is one area where nonbanks have created more of a “service” rather than simply offering a product, Mark Schwanhausser, director of digital banking at Javelin Strategy & Research, said in a May 2022 story.

In the same realm, Welsh, the Mobiquity chief creative officer, says bank customers could use more direction than simple alerts pointing out they spent more last month than this month. This point was not addressed in the Forrester report.

“Most people are intuitively aware of that,” said Welsh. “If a bank helps people take action in real time, people would trust it more than a private business like Truebill.” For example, a rideshare driver could find it useful if their bank app alerts them to the merits of shaving a percentage off their income every month and points out how to direct it to a solo 401(k).

Welsh also recalls an instance where a teller at his credit union informed him that he could double his interest rate by switching accounts, and made the change for him on the spot. “The bank has the trust component,” he said. “Now they have to get out to where the consumer is.”