Mobile Banking Apps Failing in Key Areas of CX – The Financial Brand


Even as some financial institutions begin issuing continuous improvements to their apps, others are falling short on square-one basics like simple screen readability. While banks and credit unions must keep all generations happy, close attention to the needs of Gen Z and Millennials represents a definite investment in the future — and the present.

When “one-click” ordering can buy you almost anything that Amazon sells, having to click incessantly to conduct a transaction in a banking app can quickly become a boring and painful experience.

Research by PYMNTS.com and Entersekt found that while mobile banking app usage has rocketed by 200% since the beginning of the coronavirus pandemic and about half of the country uses these apps now, more than a third of consumers surveyed are not happy with their experiences with banking apps.

The research report states that “consumers, especially those from younger generations, want to use digital tools like mobile banking apps but often get frustrated when completing transactions because they must perform too many steps.”

The study points out that this isn’t just a matter of impatience. When transacting something on a banking app begins to seem interminable, consumers will often abandon the transaction and pull out their laptops or go to their desktops to accomplish it.

Don’t Miss This Hidden Issue:

Banking app transactions that take too long cause a third of consumers to worry about mistakes being made.

In fact, according to the report, often their concern about too many steps drives people to simply try to get their transaction done at a branch, when they can, even though they have the financial institution’s app.

The research found that over a third — 37% — of consumers actually prefer their financial institution’s online banking over the mobile app because they simply find it easier to use. This attitude is even stronger with older consumers. Among both Baby Boomers and Seniors, 47% favor online banking over mobile apps. Beyond that…

( Read More: How to Keep Seniors Coming to Digital Banking After America Reopens )

Why This Matters:

There’s a belief that mobile banking apps don’t offer the same level of functionality that online banking offers. This can make the bias against apps worse. That concern is strongest among Gen Zers, 25% of whom believe it, and among Millennials, 16% of whom believe it.

The perception of inconvenience and clumsiness, added to the belief that bank and credit union mobile apps as a group don’t measure up to online banking, is worrisome. This is especially because younger consumers — increasingly the focal point for financial institutions — are typically more negative about the apps than other groups.

“Mobile banking increasingly shapes customers’ relationships with bank brands, and improved digital experiences drive profitable growth,” states a report by Forrester. “For example, one in eight U.S. online adults who opened a checking account say a financial provider’s digital services (such as its app) is one of the most important factors when selecting a brand.”

Reality Check:

Traditional banks and credit unions must face a hard fact: Gen Z lives on mobile. In that mobile world, they are more likely to encounter fintech brands and branchless banks before traditional institutions.

One plus is that many Gen Zers’ financial relationships haven’t hardened yet, notes an App Annie report. Traditional institutions that remove more pain points can still win this demographic segment.

“The key to mobile is ease, accessibility and simplicity,” App Annie says in its “State of Mobile” report. “Mobile requires deliberate planning to meet consumers’ expectations.”

Finding The Balance Between Basic and Advanced Mobile Tasks

According to a separate PYMNTS.com/Entersekt report, mobile banking apps suffer somewhat from an understandable choice: “Financial institutions have optimized their mobile banking apps for routine transactions, but their UX falls short when it comes to handling more complex tasks.”

In fact, the firms suggest in that report that institutions could garner 47.7 million new mobile banking app users simply by making it easier for people to perform major account changes via their apps.

A particular pain point examined in multiple studies of mobile banking apps is the ease, or lack of ease, in opening accounts digitally. A study by iProov looked at online and app account openings together at major U.S. banks. The researchers found that 65% of institutions tested enabled account opening in 20 clicks or less. But, as the pie chart below shows, of the remaining 35%, a small number took over 31 clicks. In fact, in one instance, consumers had to click 39 times to go through digital onboarding. Typically the extra clicks result from having to close multiple popup messages after they are read (or ignored) and others concern required document reading.

In some cases, consumers’ difficulties with mobile banking apps concern physical issues. Overall, 17.2% have difficulties reading banking apps’ screens and 12.8% have difficulty typing on their mobile device to interact with their app, according to PYMNTS.com and Entersekt. And it’s not just older consumers. The chart below details these and other usability issues, broken down by generation.

Why people don’t use mobile banking apps, by generation

Generation Generation Z Millennials Bridge Millennials Generation X Baby Boomers and Seniors
Age 23 or younger 24 to 39 32 to 41 40 to 55 56 or older
Usability
Cannot see screen 8.20% 11.30% 15.60% 18.80% 20.80%
Cannot do everything as online 24.70% 16.00% 13.20% 14.60% 9.00%
Cannot type on mobile device 6.10% 9.80% 10.20% 11.90% 15.90%
App is too complicated 9.20% 14.00% 12.60% 7.50% 5.30%
App changes too frequently 15.70% 16.40% 14.00% 7.60% 1.50%

Source: PYMNTS.com/Entersekt

There’s more going on than simple usability issues.

Key Insight:

Security and trust issues also play a critical part in consumers’ feelings about mobile apps. Research finds that 30% of users don’t trust apps’ data security measures. And 18.3% worry that their money could be stolen.

Among Boomers and Seniors, worries about security rank even higher, with 36.3% worrying about exposure. Interestingly, the groups with greatest concerns about the risk of their money being stolen are at opposite ends, by age. 23.4% of Gen Z worries about theft, while 18.9% of Boomers and Seniors worry about it.

Read More:

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Finding Out What Bugs Consumers About Your Mobile Banking App

That consumers have issues with mobile banking apps shouldn’t come as a surprise. This is still a very new banking channel and the technology it relies on has evolved at a rapid pace on multiple operating systems.

PYMNTS.com/Entersekt research probed how various generations feel about key aspects of apps.

Generation Generation Z Millennials Bridge Millennials Generation X Baby Boomers and Seniors
Age 23 or younger 24 to 39 32 to 41 40 to 55 56 or older
Adding or removing recipients 58.70% 34.50% 43.90% 32.90% 33.40%
Opening new accounts at the same bank 33.80% 33.30% 27.10% 33.70% 41.40%
Paying merchants or contractors 32.30% 22.30% 21.20% 13.90% 16.50%
Sending money to friends or relatives 30.00% 16.10% 14.60% 11.80% 16.80%
Paying bills 21.10% 17.90% 18.00% 13.00% 14.90%
Mobile card controls 24.40% 13.60% 18.40% 14.40% 14.60%
Depositing checks 21.30% 15.60% 14.10% 12.40% 14.70%
Checking account balances 18.10% 12.50% 11.30% 6.50% 7.80%

Source: PYMNTS.com/Entersekt

When Netflix debuted a new setup that automatically starts the next episode of a show, that led to longer user sessions — a good thing for the streaming service. However, not so for a financial app: “Increased session length can be a negative, a sign that users are encountering friction and can’t easily complete the transactions they’re looking to accomplish,” App Annie states.

This is among the factors mobile banking app designers must monitor to determine how consumers are reacting to the app overall and to changes made along the way. App Annie recommends that financial institutions continuously monitor the user comments appearing on the App Store and Google Play. These can get pretty nasty, but at least they pinpoint real problems, and using the remarks is much cheaper, the consultancy says, than conducting focus groups. They supplement the institution’s ongoing testing as well.

“For example,” states App Annie, “you might notice that a new feature release is actually having a negative impact on your average session duration. Looking to your reviews for more information, you see that many users are complaining that they now get an error upon opening the app; you now know there’s an urgent issue you need to work with your engineers to fix.”

App Development Tip:

Reviews of apps can be a good feedback mechanism to guide what features to build next, because users will make suggestions and requests in their comments.

Financial institutions can also look to market leaders for features and approaches that could serve as guidance. Gartner, in a ranking of “digital IQ,” classified Bank of America, Citibank, Capital One and Wells Fargo as “genius” grade. Classed as “gifted” were U.S. Bank, Discover, PNC, Chase, Navy Federal and USAA. In its app rankings Forrester put USAA at the top for digital experience, citing both features and UX design, and likewise put Bank of America at the top among traditional bank brands. Ally Bank is considered the leader for UX, with Forrester citing them for smooth navigation and strong content design.

Read More:

A Short ‘Do-List’ for Mobile App Improvement

Drawing on the reports cited in this article, here are some points to focus on when revamping mobile apps:

  • Keep it simple. Frustrations rise when apps get too complicated.
  • Don’t ignore security for sleek looks. Fancy screens and graphics won’t set worried minds at rest.
  • Personalize the app where possible. This goes beyond “Good morning, so and so.” A best practice cited by Forrester is providing personalized spending insights and in-app credit score updates.
  • Match app features with online banking features. This isn’t as simple as porting an institution’s online features over to the mobile app, because design must play to the strengths of the devices for each channel. But it should be clear that both channels are the same in terms of functionality.
  • Give more thought to error prevention and error resolution. People make typos and misunderstand questions. The app should make it simple and easy to make changes to entries.
  • Ditch banker-speak for plain English. Falling back on “the compliance burden” may placate examiners, but challenger banks that consumers find to be user friendly manage to make themselves understood.

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