Mobile banking is skyrocketing today. The digital banking penetration rate has jumped from 65% in 2017 to 88% in 2021. Consumers experience the benefits of greater convenience, speed, and financial insights driven by new mobile banking application features and upgrades. Mobile banking customers have huge expectations as technology platforms like Amazon, Google, and Instagram set high standards for customers. They expect the same frictionless experiences when operating their banking apps. As customers ourselves, we want tailored, relevant content, a seamless omnichannel and gamified experience that keeps them engaging at every touchpoint with the financial institution.

Customer experience has risen as a top priority for banking leaders in recent years. No longer do customers perceive their interactions through the lens of a single industry. Instead, customers would like to conveniently receive different services from multiple industries through a single platform. This desire rings true, especially with the rise of SUPER APPS and marketplaces. Customers want banks to focus on developing an experience culture that caters to their requirements, fosters trust and personalisation services and surpasses their expectations.

Critical customer expectations when it comes to digital banking experience are:

• Easy accessibility – Make banking apps easy to use and simple to access. Usually, customers look for frictionless onboarding, negligible abandonment rate, and seamless navigation.
• Real-time assistance – 60% of customers believe real-time support is crucial for instilling loyalty. So banks that utilise real-time help solutions like humanised bots, remote phone calls and video chats to give real-time assistance are gaining customer attention and loyalty.
• Personalised services – Personalised services and relevant products hook customers, as it inquires the customer to continue searching for products and services tailored to their specific requirements. Banks should begin to track the journeys of individual customers that help build products tailored to customer needs.
• Data security – Within banking and financial services, data security has long been the top priority. As customers, we want to feel safe sharing personal data and information with the bank while knowing that the data is put into good use. As a result, banks are building trust mechanisms by communicating clear use cases of customer data and advocating the efficacy of digital banking.

A successful banking application: The three stages

Features of a banking app feed directly to a customer’s experience. Let us explore which features are absolutely mandatory for any banking app and the notable optional ones to add value to the customers.

#1 Foundational stage – App efficiency:

• Security is the primary factor

It is critical for any bank to secure its mobile banking app completely. The architecture of mobile banking apps is usually prone to serious mobile banking vulnerabilities that may lead to financial security breaches. Banking applications must enable secure customer onboarding and protect personal information during every customer session on the app. It should also be hacker-proof and immune to cyber-attacks.

Banks rely on software development partners who can assure the server and customer-side security of the banking application. Apart from basic app security programming techniques like access token and cookie protection, encrypted transport protection (HTTPS), and other assurance mechanisms to verify both the mobile device and the back-end system, there are a few different approaches to increase app security:

1. Biometrics: A secure and straightforward method to log into mobile apps using biometric data from fingerprints, face, iris, or voice. The biometric technologies expected growth by 2027: USD 42.9 billion in 2022 to USD 82.9 billion, at a CAGR of 14.1%.
2. Dynamic CVC2: It is a three-digit bank card verification code that’s generally static. The Dynamic CVC2 allows changing the verification code to a random number once a day or once an hour to boost security while making payments and fund transfers.
3. Multi-factor authentication: Involves using three levels of protection:
   1. The first layer of authentication is device binding, linking the registered mobile number to a specific user account. Then, the customer information is linked to their mobile number, and they must authenticate by adding their government ID data, depending on the use case and country of operation.
   2. The second layer is the classic PIN code. This knowledge factor tightens security with an additional layer. This second layer serves as the backup and root security for the other authentication factors — the solution is a built-in randomised secure PIN pad to fend off attacks such as key loggers.
   3. The third layer comprises biometric factors, including fingerprint and facial recognition. Biometric authentication provides convenience since it eliminates using PIN codes repeatedly.

• Journey-based features

Customers undergo four major journeys when using the banking application:

1. Transact
2. Save
3. Borrow
4. Invest

The bank simplifies the experience within each customer journey by providing essential features. These enable them to navigate the app easily and fulfil everyday banking needs. The must-have features for mobile banking applications that every bank can build based on customer preferences consist of:

1. Balance and transactions
   The ability to see balance and transaction history at a glance has become one of the most critical features for banking applications on mobile devices. It is frequently the first thing customers see when they open an app – it shows them their balance and allows them to locate and recognise transactions easily.
2. Payments
   Mobile payments allow everyone to enjoy banking from the comfort of their sofas. Users can identify crucial payment categories:
   1. Everyday transactions,
   2. Peer-to-peer payments,
   3. Debt and mortgage-related payments,
   4. Bills and more
      Integrate all payment categories onto a single platform so that customers can pay seamlessly.
3. Cheque deposit:
   Cheque deposits save a customer’s time from a trip to the bank when they need to deposit a cheque. Now, they take a photo of the cheque from both sides, endorse it, and upload it via the app.
4. Push notifications
   In addition to providing account status updates, alerts may ask users to approve a planned transaction (example: Auto debit Netflix monthly subscription charges), which they may do with a simple touch. This feature is excellent for convincing customers to enrol for automatic pre-scheduled payments.
5. Manage cards
   Customers can block their credit and debit cards, assign them to a different account, set limits, change the PIN code, and do many other things that physical banks support on the app.

The basic functionalities mentioned above are just a fraction of what a mobile banking app can offer to customers. In the next stage, let us explore the features that can transform a traditional bank into a leading digital bank.

#2 Transactional Stage – App engagement:

Driving app engagement comes with value-added features beyond basic banking activities to make life easier for the customer. These value-added features are:

1. QR code payments
   QR code payments are quick, and if the infrastructure is in place (for example, QR codes on public transportation or in stores), users may use their mobile devices to pay instead of purchasing with cash.
2. Cardless withdrawals
   The ability to withdraw cash when you forget your card is a big deal. Some apps will have QR codes or other forms of interaction with ATMs, even when you do not have a card.
3. Live chat (Chatbot)
   A chatbot is a good channel for banks to automate simple and routine actions (such as checking account balances, credit card balances, and changing addresses) that do not require human intervention. Train the bots to conduct interactions following customers’ preferred language style.
4. Spending tracker
   Utilise data analytics to allow consumers to manage their finances on the go. Financial management is a constant challenge for customers. Therefore, providing meaningful information on monthly expenditure helps customers better understand their spending – aiding better financial planning.
   The following are typical components of an expenditure tracker:
   1. Savings goals — Allow users to define their own savings goals and deadlines for achieving them.
   2. Interactive dashboards — Instead of utilising spreadsheets, consider employing images and animations to show information graphically.
   3. Personalised reports — Provide users detailed insights into their spending behaviour based on the information customers provide, such as the products customer usually spend on, the day the customer spends the most in a month etc.
   4. Budget categories — Think about categories of things people spend money on, such as groceries, insurance, healthcare, and entertainment.
5. Repeat payments
   People make regular payments all the time. The bank can use the recurring payments functionality to help customers automate such payments. On top of auto-deductions, the bank also includes functions like informing a user when a payment is due.
6. Investing
   If the internet banking system supports investments (per the licensing capabilities of the bank), add this functionality to the mobile app. Additionally, an increase in awareness of personal finances has increased the trend of investing among the younger generation.
7. Cashback
   Cashback strongly retains customers and is an easy way to set yourself apart from your competitors. Add a few categories and let consumers pick the items or services they want to get cashback bonuses from.
8. Special offers
   To advertise a mobile banking app or enhance user engagement, do not be afraid to include exclusive deals in the app. Develop a QR code payment function, for example, to entice customers to utilise it by providing them discounts or cashback for each QR code transaction they make.
9. Splitting bills
   Not only for financial startups but also existing banking applications, bill splitting is a fantastic feature. Customers will appreciate it since it will be able to address the age-old problem of dividing a bill after eating out.

#3 Designing stage – App aesthetics

Designing a mobile banking app is the first thing customers evaluate when interacting with the app. But how can banks provide customers with a user-friendly experience that meets all their needs? The following tips will help banks do that:

1. Let users customise the app interface
   Users may customise the user interface (UI) and user experience (UX) of the app to meet their demands. For example, allowing users to pick their preferred text size and icon positioning will enable them to engage with the app software in the most comfortable way possible.
2. Provide an omnichannel experience
   Users may access banking information on various devices, including smartphones with different screen sizes, tablets, and smartwatches. This level of access provides a seamless user experience across different devices, enabling customers to pick up from where they left off.
3. Make the user interface as basic as possible
   Complex data and functionalities are often present in online banking applications. Create a basic and minimalist design that organises design components to avoid overburdening the application interface. This design requires banks to understand which functionality is important to customers, so you can design straightforward interphase that suits your customers’ needs. Try to build an intuitive design which creates an experience that does not necessitate the use of instructions or explanations. A design like this is predictable and feels comfortable.
4. Make a trendy and appealing design
   Users tend to form a first impression in 50 milliseconds. Therefore, create a contemporary and aesthetically engaging interface design to guarantee a favourable first impression and a smooth user experience.
   The most important guideline of modern and attractive design is maintaining a sense of equilibrium. Avoid overcrowding the interface with pictures, symbols, and text while creating a financial app. Users are confused by clutter, which makes navigating more difficult. Also, avoid combining too many different design trends. Stick to one design style and stick to it throughout the process.

6 Steps to building a mobile banking app

• STEP 1: Build and verify a prototype:

Create a prototype and test it with the target audience to check if they are utilising it as intended. Fortunately, building and testing a prototype takes 10 times less time and resources than designing a full-fledged mobile app.
Iterate the prototype based on target audience input until everyone is satisfied. With this strategy, the bank will be able to design a solution with a proven product-market fit without squandering resources.

• STEP 2: Lay the groundwork for security

Customers expect top-notch security, whether they are dealing with a traditional bank or a startup attempting to resuscitate mobile banking. After all, they are entrusting their money to the app.
Banks should safeguard the app and server, but they also need to educate the customers (and employees) on cybersecurity best practices. On the app’s side, the bank should consider:

1. Source code obfuscation to prevent attackers from decompiling an app and extracting data for hacking
2. Deleting names of classes and functions from source code
3. Adding code injection and repackaging protection
4. Using SSL and 256-bit encryption

The following are some of the top-of-the-line security features that make a mobile banking app more secure:

1. Transaction verification through a brief code given via push notification
2. Two-factor authentication
3. Password changes regularly

The bank should also consider the comfort of the user and incorporate features that both safeguard and ease app usage:

1. Enables for simple access with short pin codes
2. Supports bio authentication via fingerprints and Face ID
3. Requires users to change pins regularly.

• STEP 3: Agree on the technology stack for the app

Building a complete virtual operating model is no easy feat, as it involves high regulatory, security, and reputational risks.
A well-defined technology stack enables data democratisation and innovation towards frictionless customer experiences. We at twimbit have already deconstructed the technology stack for a digital banking application. Click here to view

There are 3 layers of the technology stack:

1. Hosting infrastructure
   Neobanks prefer a hybrid cloud infrastructure that allows them to store and operate in the public cloud for third-party integration while the private cloud stores and develops the neobank services.
   A digital-only platform on the cloud enables developers to create, test, deploy and cancel services within short timeframes in an agile environment to create, test, deploy and cancel services within short timeframes.
2. Open-source core platform architecture:
   A well-established core platform based on open third-party integration principles is a critical future-proofing strategy for banking applications.
   Apps should be built on the containerised methodology to quickly scale, manage, and deploy applications that help them build interactivity and frictionless experiences in the front-end user interface.
3. Front-end application for customer
   The rise of digital banking applications and their popularity stems from their ability to shift the mindset about banking on a radical scale from one that is a serious, standardised affair to a fun, gamified and interactive experience.

• STEP 4: App design

After building an app, it is time to give it a fresh coat of paint. The app will have at least completed half of its interface at this stage, but the bank will still need a UI designer to make it look great.

• STEP 5: Release, integrations, good-to-haves

Once the app is ready for release, any more work done will have little impact on its progress. The next plan is to implement API (Application Software Interface) connections with other programmes that customers would benefit from, such as document signing software, third-party expenditure trackers, and accounting software.

• STEP 6: Maintenance

After releasing the app, the bank should pay attention to customer feedback, repair any pesky problems, and provide the greatest possible user experience. The bank would have complete documentation on app features available and accessible to the target audience in an ideal world. FAQs and chatbot advice help decrease Support expenses.

Conclusion

The success of a good banking app depends on its advanced security, attractive app design, and the availability of bank services and products delivered by the app. Therefore, the bank should critically plan out the required feature set for the first and subsequent app revisions and ensure that the MVP (minimum viable product) helps discover any severe design or product-market fit faults.

Reference

Digital banking reaches new level of maturity in Apac. Fintech Singapore. (2021, October 8). Retrieved May 24, 2022, from https://fintechnews.sg/56123/virtual-banking/digital-banking-reaches-new-level-of-maturity-in-apac/

Attention web designers: You have 50 milliseconds to make a good first impression! Taylor & Francis. (n.d.). Retrieved May 24, 2022, from https://www.tandfonline.com/doi/abs/10.1080/01449290500330448

Biometric system market. Market Research Firm. (n.d.). Retrieved May 24, 2022, from https://www.marketsandmarkets.com/Market-Reports/next-generation-biometric-technologies-market-697.html