For millennials, the ability to easily check balances, pay bills and transfer money on a mobile banking app is no longer enough.
To land and retain millennials as customers, mobile banking apps must graduate to leveraging the native functionality of mobile hardware. Each and every function of the mobile phone can be used to differentiate the engagement a bank has with its always connected customers.
Following is a list of seven features that are defining the next generation of mobile banking:
Mobile banking apps that use Bluetooth can take advantage of Beacons — low-cost hardware that uses Bluetooth to transmit messages — and the internet of things (think smart devices like Nest) to provide a personalized in-branch experience. When a customer enters the branch, his smartphone might receive a greeting from the bank on his mobile phone, for instance.
The IoT devices that communicate with mobile apps can also transmit relevant banking alerts and promotions and offers at merchant locations, in addition to making contactless payments.
NFC, a short-range wireless technology that connects devices, is the basis for how most banks will provide mobile wallets that let customers make contactless payments at the point of sale. NFC can also let customers use their mobile phones to authenticate and withdraw money at the ATM, rather than insert physical cards. The technology can also let mobile apps print out documents, when needed.
The mobile phone's camera can be a boon for mobile banking services. Banks can deploy digital-only onboarding where consumers apply for accounts by using the camera to upload documents, such as their driver's license or passport, for instance.
The mobile phone camera can also enable augmented reality to, say, locate a branch or ATM and make services like video chat with a banker a common communications feature. The ability to integrate a QR code reader through the camera can also let customers scan and pay physical bills and store receipts digitally.
In addition to using the device speaker phone for calls, the microphone can enable services like voice banking using Apple's Siri or Amazon's Alexa and chatbots for live customer support delivered by a machine.
Furthermore, the microphone will enhance the security of mobile apps by offering voice-based authentication and the ability to use the voice as a password. Expect common voice-enabled instructions like "give me directions to the nearest ATM" or "send 20 bucks to Jack."
GPS can do a lot more than help navigate a person along the roads. It is being used for geofencing and geolocation — which, when combined, let brands send relevant advice and contextual offers to customers when it is most applicable. For instance, customers at an airport can receive information from the bank on foreign currency deals or travel insurance. This feature also allows a bank to preempt false positives of fraud detection when a customer is attempting to use his debit or credit card abroad.
As the reliance on mobile banking grows, so too does the need for stronger security and easier authentication. Today, most modern mobile phones offer fingerprint authentication, such as Apple's Touch ID. While the technology is still maturing, biometrics authentication provides convenience to customers who don't want to use complex passwords all the time.
Virtual reality and augmented reality, which are just beginning to capture public attention, are steadily becoming technologies that create immersive engagement with customers. Several banks are leveraging the technology to create virtual meeting places with their customers, augment data dashboards and portfolio performance and provide a surprising experience that inspires customers to advocate for the bank's brand. For example, VR could create a memorable experience by being used in the bank branch to do a virtual tour of a real estate property for someone applying for a home loan.
Today, the mobile phone is much more than just a phone. To capture the wallets of millennials, banks must make use of the smartphone's many features and deliver digital experiences that are natural and intuitive.
David Horton is head of innovation at Synechron, a global consulting and technology firm.