A recent study by digital vendor MX highlights the disconnect between the expectations of young millennials and Gen Z customers and the digital platform deployed by most community banks. First, let’s set the stage for this discussion with some level setting: Most community FIs have what can only be described minimally featured mobile banking apps. These have the basics but few features that mirror the types of features and customization in most other financial apps that are available to younger customers; 80% of all younger customers have at least one other financial app (ie: PayPal, Cash App, etc.) on their mobile device; 48% of younger customers have a credit card; The MX study indicated that 57% of those surveyed felt that they would not sign up for or would soon abandon a banking relationship where the mobile app was perceived to be a “bad experience.” What are the signs that indicate a bad experience? They include: Lack of speed – take too long to achieve tasks. This can be the result of latency between the servers and the mobile device or could be too many unnecessary steps (ie: requiring the rekeying in of information that the app should already have …) Too many clicks – poor architecture makes it difficult to quickly navigate and execute tasks Dated user interface – the “look and feel” of systems matters. Younger customers have an expectation of what modern apps look like and when they see an older looking banking app, they may not even make an attempt to use it. Overall, there is an emphasis on efficiency and speed that drives the younger prospect or customer. But the user interface has to be esthetically pleasing, which is essentially artistic, which is different for each individual. It is likely that the FI’s mobile app was not designed with a younger customer in mind. All of this leads to dissatisfaction with the overall digital experience, which is a problem for FIs who need more younger customers who prefer the digital branch as their primary mode of interacting with the FI. A separate Financial Brand article was more specific to the issue of upping the game for mobile banking. The article highlighted the three “must-have” features your mobile banking app must have. Whether these three are the three must-haves is subject to argument. I can’t disagree that these three are critical to attracting and keeping younger customers. Let’s examine each of these three features: Search Capability – There is nothing more frustrating than knowing that information is available, yet you are unable to access it because you are not posing the query in the manner the tool requires. What technology now allows but few FIs provide is a digital assistant. A human form, natural language concierge that can understand your intent and provide meaningful responses to natural language queries. Notifications and Alerts – The level of personalization for how one manages their accounts and activity is still in a nascent stage. Consider the level of customization of the experience that a Gen Z has over a first-person game on their phone. They can control virtually every element of the game to suit their personal play preferences. Now consider the level of customization your banking application offers. There is likely a significant difference in the customization experience. Control over debit card usage, types of bills dispensed at an ATM and identification of potential duplicate or unneeded transactions are just a few of the examples of the types of notifications and alerts that could be presented to mobile users. In-app Support – Just the ability for a client support rep to be available to any mobile user similar to the support provided in a video teller event is the easiest path to increasing customer satisfaction. If support is available via the ATM, what is preventing it from being available in a mobile session? The relationship of the digital capabilities of the FI and its ability to attract and keep younger customers cannot be overstated. Furthermore, the above three issues are by no means the only gauge in which to measure your capabilities, but it’s a good place to start. Remember that your younger customers are not assessing your digital capabilities to other FIs. They have an expectation across a wide variety of apps that they regularly use, and this forms their expectation for what a digital experience should be. You are being compared to that standard of customer experience. At a minimum, your institution needs to establish a budget for the advancement and upgrading of the digital branch no less than what you allocate to physical branches. Ask yourself this, if we would spend $350,000 on a paint and powder upgrade of a physical facility, why wouldn’t we spend at least as much to our online / mobile banking offerings? If you would struggle with justifying that type of periodic spend on the virtual channel, the one place that has the ability to attract and keep younger customers, then you need to take a long and hard look at your strategic priorities and perhaps make some changes in your focus. Your failure to increase the number of younger customers you retain will have long-lasting negative effects on your ability to remain relevant … and profitable! References https://thefinancialbrand.com/news/digital-banking/mobile-banking-trends/mobile-banking-features-must-keep-improving-or-else-181510/ https://thefinancialbrand.com/news/digital-banking/mobile-banking-trends/how-to-improve-your-banks-mobile-app-182824/#:~:text=The%20research%20firm%20says%20focus,%2C%20and%20in%2Dapp%20support.&text=Leading %20U.S.%20and%20Canadian%20banks,individual%20aspects%20of%20their%20apps. The views expressed in this blog are for informational purposes. All information shared should be independently evaluated as to its applicability or efficacy. FNBB does not endorse, recommend or promote any specific service or company that may be named or implied in any blog post.