Preparing for an imminent future when the average customer rarely visits a branch, some banks are diverting additional resources into development of mobile-only services that do a lot more.

“Mobile engagement continues to be the key to our digital banking success,” said Zahid Afzal, chief information officer and chief operating officer for Charlotte, N.C.-based Capital Bank. “The amount of change happening in customer preferences, and the competition — from fintechs and other banks —make it an exciting time in the industry.”

Last year, the bank invested in a platform from the digital vendor Malauzai that included a revamp of its mobile bank offering, adding features such as greater payments capabilities and more robust account alerts. Afzal added the bank is also examining how to integrate with virtual assistants such as Amazon’s Alexa and Apple’s Siri so customers can use those services to get banking information.

For Capital Bank, investments in mobile are necessary to remain competitive. Afzal said three years ago about 17% of its digital user base were active mobile users; today that number stands at 45%. Afzal added mobile has now surpassed online banking engagement at Capital Bank, as measured by the number of transactions completed on each channel.

Capital Bank is hardly the only financial institution seeing these numbers trending upward. Vons Credit Union in El Monte, Calif., now counts 71% of its total member base as mobile-only users.

Three segments in mobile-only banking attracting more investment in 2017, according to Javelin Strategy & Research.

“For us, mobile is about member experience and making things so simple and intuitive that they don’t even have to think about it,” said Donna Simpson, chief operating officer for the credit union, which primarily serves grocery store chains.

Like Capital Bank, Vons recently overhauled its mobile services in response to increasing customer engagement in the channel, with features including member-to-member transfers, picture bill pay, check imaging and more in-depth account information. This comes as Vons Credit Union is getting more engagement on mobile than even online banking.

“We’ve seen a steady decline in branch and phone usage, online is flat, but mobile is on a steady incline,” Simpson said.

Still, while some progress has been made — with some banks adding money movement capabilities such as Zelle, more robust financial fitness tools and features such as chatbots and virtual assistants — there is more to be done before mobile can truly stand alone as a delivery channel, said Emmett Higdon, director of mobile for Javelin Strategy & Research, which this month released its annual scorecard examining mobile capabilities of U.S. banks.

According to Javelin research, many banks still fail in providing robust security controls for mobile, have limited sales and marketing integration with mobile channels, and even withhold information from their mobile channels that can otherwise be found online.

Banks are “stuck midway along the digital maturity path,” Higdon noted. Many have moved past the basic transactional services that typified mobile 1.0 but still fail to provide predictive, consultative advice, he said.

“Think about the common interactions [on mobile]; there’s a huge missed opportunity,” Higdon said. “You might get a low-balance alert, but there’s very little follow-up to that alert. There’s no advice or suggestions for a next step.”

Banks, noted Higdon, must take mobile from a mass customized experience to a more individualized one. “There’s very little about a mobile banking experience today that is a like a one-on-one interaction,” he said. “That is something customers are hungry for: individualized advice and recommendations.”

Many banks struggle with this largely due to legacy core systems, said John Mitchell, CEO of the payments software technology vendor Episode Six.

“In many cases, it is difficult to work with core banking systems,” Mitchell said. “It’s written with code that is dated, or in some cases code that’s not being taught anymore.”

Banks don’t necessarily need to devote a large amount of resources replacing these systems, but they need to embrace open platforms and application programming interfaces, Mitchell said. Many still have a very proprietary attitude and “are reluctant to open up their platforms."

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