Why don't banks tap the full potential of their mobile banking apps?

Expectations of banks’ digital offerings continue to rise as consumers are exposed to the seamless experience of retailers such as Amazon. While most financial institutions are offering transactional access to accounts and information via smartphones, Amazon is making suggested “next purchases,” offering subscription discounts for repeat purchases, and providing “Buy It Again” offers. That level of personalization, something consumers find on almost every retail site in some form or other, is what consumers, especially digital-native customers, are expecting.

By fulfilling these consumer expectations, the banking industry has a clear opportunity to leverage digital technologies in the quest for customer acquisition beyond physical boundaries, and create enduring relationships. Financial institutions can tap into this potential through a “digital feeders” strategy: developing online account origination (OAO) capabilities in the open market to acquire new customers to “feed” the mobile app as an enhanced relationship platform. Leveraging the successful experience of BBVA globally, BBVA Compass has implemented this strategy with two components in the US as well:

First, the development of product-centric acquisition capabilities as digital feeders.

BBVA Compass has been developing OAO capabilities in the open market to acquire new customers and feed our mobile platform. We call this our “digital feeders channel,” and we use it to acquire customers by offering our own proprietary set of products, along with our fintech partners’ products and those of other affiliate and point of sale partners.

Merely offering online access to products is not enough, though. Today’s customers demand easy, seamless digital flows. At BBVA Compass, we combine broad product offering with responsive design, and end-to-end digital completion, all in a click-to-get format. We have been mastering the full customer journey by continuous A/B testing, quantitatively measuring the customer experience (e.g. how much time spent on each screen, the place of clicks, the drop-off points, etc.) and calibrating the design accordingly.  At the back end, advanced fraud processes and risk analytics are essential to even sit at the digital table.

Second, the transformation of our mobile app to an enhanced “relationship platform.”

Customers who acquire products digitally also are more likely to access account information and functionality using the mobile app, and ultimately, to adopt the mobile application as part of a seamless acquisition and interaction process. The mobile app serves as the relationship platform and as a tool for customers to apply for and obtain additional products, effectively maximizing the client relationship.

In order to facilitate this process, we implemented our “green button,” which allows consumers to complete the entire account-opening process for core products without visiting a physical location. For example, BBVA Compass customers who were acquired digitally through a checking account can then apply for an Express Personal Loan, our unsecured consumer loan, through the mobile app using the green button and can get same day funding upon loan approval.

By using the consumer data, analytics and financial solutions already in our grasp, financial services companies can create a robust platform designed to engage and inform customers, deliver personalized marketing messaging, and provide products and services.  This is how we are transforming the mobile banking app from a tool to manage transactions into a digital relationship platform.

In order to successfully implement this “digital feeders’ strategy,” BBVA Compass has built some key differentiating capabilities:

• An extensive end-to-end digital product origination catalog. Offering online access for a single product will never achieve the goal of the digital feeder strategy. Consumers must have access to an entire range of products online in order to establish a robust digital relationship.  This includes products from checking accounts to personal loans, from credit cards to insurance.
• Award winning mobile functionalities. The BBVA Compass mobile banking app provides a number of customer service that have it enhanced it beyond traditional functionality:  intuitive navigation, in-app search function and interface personalization are just a few of those features. We have also added customer service features including real-time chat, click-to-call, profile management and statement access. Our effort to continually improve our app and deliver the kind of functionality that consumers demand in an online experience has prompted Javelin Strategy & Research to rank it a leader in ease of use and customer service in 2018.  Based on independent surveys, BBVA Compass’ mobile app penetration to active customers is also the highest in the US among all large-scale banks.
• Personalization: Like other banks, BBVA Compass has access to current customer product information, as well as consumer data and insights. We are able to combine and analyze that information to develop and deliver timely, personalized financial suggestions and recommendations, as well as appropriate product and service recommendations. Collaborative partnerships also allow us to make non-BBVA Compass account information visible in the app, giving customers a 360-degree view of their finances in our personal financial management tools.

As we develop and deliver online acquisition capabilities, we are able to capture the full potential of the open market, and by developing mobile functionalities that foster personalized interactions, we are creating a mobile banking app that can achieve its most valuable iteration: a relationship platform.  An app that delivers meaningful, personalized information can become the foundation upon which relationships are expanded and developed through valuable guidance and easy access.

In the race toward a more comprehensive digital relationship, it’s important to remember that we are all people serving people.

In the race toward a more comprehensive digital relationship, it’s important to remember that we are all people serving people. Customers still value personal interaction, and there remains a need for continued emphasis on the human touch in the banking relationship, particularly in seeking guidance or financial advice.  The success in tomorrow’s banking will be defined by excellence in each individual channel and the mastery in coordinating different channels to serve different customer segments in the way that they demand.

With consumers becoming increasingly accustomed to a seamless retail experience across all channels, the key takeaway for banks is clear. We cannot choose to develop either a robust digital platform or a well-staffed, service-oriented branch network. The successful banks -- the ones that will survive -- must do both.