Digital bankers are apt to cite Amazon, Zappos and Google as muses. But the financial industry has a long way to go before it can offer experiences like those brands.
Some institutions don't even let customers search past online transactions for keywords (say, "Whole Foods"), let alone make recommendations about what the consumer should do next, a la Amazon.
Now, two early-stage financial apps are paying tribute to a particular tech tool: Google Now, which is designed to act like a virtual assistant. It mines search, Gmail, location data and other sources consumers give it access to, for information customers might want reminders or alerts for, such as upcoming flights or bill due dates or their favorite sports teams' scores – without requiring them to search. Similarly, these newer fintech apps – Penny and Sense – are designed to provide need-to-know financial information whenever someone fires up the app.
Their arrivals into the market come as traditional banking apps are getting added sophistication while more consumers – who are not necessarily tech savvy – are using the channel. According to a new Forrester Research report, 36% of US online adults are active mobile banking users. That's up from 13% in 2011.
"Until recently, mobile banking users were typically early adopters of new technology, keen to try out new things," reads the report, The State of Mobile Banking, 2015. "As mobile banking use becomes mainstream, later adopters are likely to be less sophisticated mobile users. Leading banks no longer assume that one size fits all."
Sure, customization has long been viewed as a way to get people what they want and need. But historically, banks have been challenged to highlight digital features on desktops, let alone mobile devices. The new apps offer one way to tackle something any bank app could encounter: too much information that bogs down the customer experience.
Inside the Apps
Penny, an early-stage startup in the U.S. that uses Plaid for account aggregation, requires consumers to download an app and link in their primary banking account to spit out insights on spend data like other apps like Mint. Sense, rolled out by Alfa Bank in Russia, is a mobile banking app and it highlights information like upcoming bills and travel insurance for individuals about to vacation in the order its algorithms believe are most pressing to consumers.
Both are trying to make finance more proactive. But that's a tall order for something perceived as a chore if not a portal into depression.
"Most people don't want to think about personal finances because it is not fun and it's very scary," said Mitch Lee, co-founder of Penny.
So Penny, for instance, is working to make that experience more engaging by analyzing transaction data to generate data-driven stories like, "You spend an average of $14 a day on food."
The app is conversational – emojis included. Consumers aren't chatting with a person but choose prompts based on what they want to talk about, such as spending patterns.
It's early days for Penny, but Lee hopes to stick to the business plan to go direct to customers and eventually guide them into action the way Google Now is intended. A future alert, for example, might read something like, "You mentioned that you have an upcoming trip you're saving for. If you take public transit instead of ridesharing this week, you can save an extra $25 for it!"
Sense, a newer app rolled out by Alfa Bank in Russia, is also borrowing Google Now concepts in an attempt to remedy a flaw of most institutions' apps: too much information. So in a world where banks sells dozens of products and services, Sense aims to only show information that matters to the customer and present them in ranking order on card-like interfaces.
"The app lives with you," said Nikita Filippov, chief executive of Octoberry, which helped develop the app.
The apps' arrivals come as banks worldwide are working to make mobile experiences quick and easy as they layer in more features.
Oliwia Berdak, senior analyst who serves eBusiness and channel strategy professionals at Forrester Research, said consumers don't yet struggle to find what they are looking for but could as they replace PC, telephone and branch banking with their mobiles and banking apps become more complex.
So to inspire awareness and usage of what's available, Berdak says a handful of banks are finessing their mobile approaches so take-up of more sophisticated features doesn't disappoint. Allied Irish Bank, for instance, is among the banks educating customers with tutorials and videos about what's changed. Other banks — DBS Bank, Isbank, and Westpac — offer app-wide search engines to not only help customers find past transactions but to also discover products and privacy information.
Of course, all brands want to create an app that consumers intuitively know how to use.
"They aren't looking for an instruction booklet," said Warren Taylor, president of BankMobile, the mobile-first offshoot of Customers Bancorp.
But some may need a little guidance. BankMobile, for instance, uses in-app messaging, emails and video tutorials to get customers familiar with all that's part of the digital package. It is also in the midst of a mobile banking overhaul that will include added customizations.
And already, interested customers can hop on the phone with advisors to discuss topics like cars even though BankMobile does not yet sell auto loans.
"I believe in giving customers what they want," said Taylor. "One size does not fit all."
Stephen Greer, an analyst at Celent, imagines a day when there's a bank app that spits out advice and gives customers an option to connect to a concierge service, potentially for a fee or as a perk for loyal customers, and in a conversational manner.
"It's almost like texting with a friend or somebody," said Greer.