mobile banking app
By Brad Powell

I’ve spent some time this past year writing about the rise of mobile banking services and what it means for credit unions and banks. Whether it’s Apple Pay, opportunities with auto loans or the emergent alternative lending industry, it’s apparent that financial institutions will be spending more time devising mobile solutions in 2016 and beyond.

It’s an area that changes quickly. So I try to keep up with the news.

Today’s post rounds up three articles I read over the last several days that contained insights about the state of mobile banking at the end of 2015. I encourage you to click through and give them a read, and let me know what you think on Twitter, or in a LinkedIn Group such as Credit Union Insight, Credit Union Times or Bank Innovation. I will definitely respond!

1. Big Banks Battle Startups With New Apps and Services
Jacqueline Emigh,CIO

Faced with rising competition from non-traditional banks, more and more financial institutions are fighting back. Emigh does a nice job of surveying the current battlefield.

One incumbent making strides, Emigh reports, is Minnesota-based Stearns Bank:
Unlike most other community banks, Stearns views (and treats) lending as a process that shouldn’t be a paper-based ordeal. Stearns supplies online application forms for home mortgages and SBA loans, for example, along the same lines as you might get from specialized lending startups.
According to Darren Lowe, vice president of Information Technology ... Stearns is also adopting banking systems and automated workflows that will remove the need for loan seekers to enter the same data multiple times during the loan approval process.
One way the upstarts have gotten a foothold in banking is offering better customer experience. Stearns’s effort seems to recognize that and counter it well.

Also of interest in Emigh’s piece is this balanced assessment from Forrester analyst Benjamin Ensor:
It is not the case that all startups are winning and all established firms are losing. Many FinTech startups will fail, but we believe a minority will succeed. Some established firms, particularly weaker ones not focused on customers, will be pushed to the wall over the next decade because they will lose customers to new businesses and stronger customer-obsessed competitors that learn from (or acquire) successful new businesses.
2. Why Banks Need to Learn From Their Technology Counterparts
Max Speur,

If I had written the headline for this piece, it would have been:

Banks Need to Leverage Trust and Continue to Improve the Customer Experience

As many articles on the financial services industry do, this piece looks at the competition banks and credit unions face from startups that are focusing on digital transactions – especially from mobile devices.

As noted above, banks and credit unions need to put their primary focus on customer/member experience if they want to compete today. As Speur writes:

Banks need to make new technology as accessible and useful as possible to improve the customer experience. If they can improve the services they provide to their customers, banks will retain them for longer by showing true value.
In the process, however, banks and credit unions need to hold on to one of their big advantages in the financial sector: trust.

“Banks are still currently one of the most trusted institutions in handling and storing customer data,” Speur writes, citing a study from earlier this year that shows U.K. banks are more trusted with consumer data than charities, the government and supermarkets.

(These findings square with an Accenture report from last April, too.)

Caring for the customer and keeping their trust seems like a winning combination.

3. Mobile Banking On The Rise, Thanks To Tech-Savvy Millennials
Lauren Lyons Cole, International Business Times

Words like “disruption,” “relentless,” and “nimble” are staples in mobile banking coverage. For instance, Cole paraphrases PWC partner Dean Nicolacakis like this: “The successful banks will have to develop a relentless focus on the customer, he said, to keep up with the nimble startups against which they are competing.”

I am not saying I disagree. This article went a step further, too, laying out the case that banks and credit union digital services will have to extend beyond the mobile device.

“You’ll be able to talk to your car, to your phone, to your fridge. Your fridge needs to be able to tell you how much you spent on groceries last month,” says Odysseas Papadimitriou, CEO of the personal finance websites WalletHub and CardHub. “A bank will have to interface with all of these platforms.”

Whether a refrigerator that helps set the budget for groceries is something that customers want, well, I’ll let you decide.



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