"For the longest time banks have been talking about the notion of omnichannel, where you are supposed to do any customer journey across any channel," said Marti Riba, a partner at McKinsey.
But McKinsey research is finding a shift in how bank customers favor different channels for different purposes.
"For some journeys or needs, the branch continues to be king," said Riba, who points to checking account onboarding as one example. In contrast, for servicing, "mobile is taking over," he said.
That is particularly true for existing customers, where McKinsey research suggests that 68% of touchpoints that bank customers have today are with the mobile app, rather than branches, contact centers, ATMs or online banking. More than 40% of credit card and personal loan sales, which are typical cross-sell products, happen in digital channels, a number that is steadily increasing.
For digital-only banks, mobile is the paramount channel for all interactions.
Brick-and-mortar banks also acknowledge the app's importance. U.S. Bancorp in Minneapolis reports that
Still, there are several reasons the mobile app is languishing as a tool to do more than transact or glance over a balance.
There is the lingering question of how to incentivize sales in the mobile app rather than at a branch. Further, certain functions in a mobile app, such as setting up bill pay, are still more cumbersome in some apps than in online banking.
Research from Javelin Strategy & Research backs up the notion that banks have a lot of ground to cover in convincing customers via the mobile app to expand their relationships.
Experts explain which features customers expect, which they love and where banks are creating a competitive edge with their apps.
In a May survey to more than 10,000 consumers, Javelin asked respondents why they don't turn to their primary bank instead of nonbank companies for some typical banking activities. Twenty-two percent said they didn't even consider their primary bank; 23% said they weren't sure if their primary bank offered this.
"This should scare the hell out of bankers," said Emmett Higdon, director of digital banking at Javelin Strategy & Research.
While the mobile app is the main way a huge percentage of customers do business with their bank today, "banks haven't really recognized this," said Higdon. "It's still looked upon as, this is how you do your transactions, how you check your balance."
One ideal banks could shoot for is something akin to a "one-click" experience in shopping. In mobile banking that could look like a preapproved loan offer that clients can "accept" in the mobile app. This requires using internal and external customer data sources to assess propensity and to pre-underwrite the loan, to pre-populate product applications, and to build automated processes to provide access to funds in near-real time.
U.S. Bank has invested in fine-tuning what it calls "individualized" solutions for its customers. The $669 billion-asset bank collects and analyzes data of its users — including transactions, goals they set in the app, offers they turn down, searches they perform with Smart Assistant — to tailor the offers it presents online or via mobile to its customers. This could include personalized certificates of deposit rates or specific credit card recommendations, such as a travel rewards card for which U.S. Bank can calculate the reward dollars a user would have earned based on the user's recent spending. For credit products, the offers are often preapproved and information is prefilled for existing customers. The digital versions of credit cards are issued instantly.
"We know there is an expectation from our clients to give them solutions to their specific needs," said
USAA segments its members based on where they're at in their life journey — for instance, starting a deployment or retiring from a job — using quantitative and qualitative measures. The goal is "to get them the product information they need and allow them to complete applications online," said Salama.
The app will rotate through content cards with insights or notifications that appear upon login. The $114 billion-asset USAA tracks how they engage with these, including whether they close them out. "Are they taking action? Are they making behavioral changes? If so, those are great insights, and we will keep those running," said Salama.
Those that do not trigger action may get edited or pulled entirely.
"We believe the more personalized we are, the more engagement we will drive," he said.
To streamline the mobile experience, USAA has shortened the number of pages credit card applicants cycle through in the app from four to one. The bank says it has reduced the average time it takes to apply for a credit card by more than 50%.
App logins are up 8% this year over 2023.
"Among our authenticated clients, Truist's mobile solutions represent the large majority of our new digital product applications, and we expect that to continue to grow as we listen to clients and use data and insights to improve our app based on what our clients tell us they need," said Sherry Graziano, head of digital, client experience, and marketing, via email.
A best practice for banks is to use discipline to push fewer but more personalized offers at the right time rather than a laundry list of options. Relationship deepening is not just about selling a product but about widening the aperture of a relationship, some consultants say.
"It's to get the customer to engage in more activities," said McKinsey partner Shital Chheda, such as paying bills, creating financial goals, and setting up direct deposits — a few of the elements McKinsey has found that help banks increase lifetime value for a customer.
"Not everything has to be sales oriented," said Bhatt. "It's also about helpful, insightful content that resonates with the user."
Another best practice is combining different forms of outreach centered on one offer rather than presenting multiple offers in the mobile app. That could include push notifications or emails with "deep links" that have a specific offer; when these links are opened on a mobile device, they take the recipient to the mobile app or mobile web to close the deal.
"The magic is to stick with one thing until it lands," said Riba.
Higdon wants to see a more consultative approach. According to Javelin data covering the top 20 banks in the U.S., only 20% have a mechanism for recommending checking accounts; 15% have the same for credit cards and 10% provide one for savings accounts.
"The only thing most offer through a mobile app is an alphabetical list of products," said Higdon.
He finds most banks spend more time and effort trying to hook new customers by filling their public-facing websites with more substantial information.
"I have no data to support this but my serious belief is if I am a customer and I have a new need, I probably won't go to the public site," said Higdon.
In U.S. Bank's case, customers can schedule
"Co-browsing is one of the highest satisfaction capabilities we have at the bank, both for the end client and for our bankers," said Bhatt.
