We’ve become jaded from testing mobile banking app after mobile banking app. Mobile banking app development has hit a plateau, with most concepts resembling each other, in shiny new colors.
In 2019 I had a few conversations with some very smart developers and technologists who were in the process of developing or thinking about developing “challenger banks”. I also attended quite a few banking meet-ups and instead of getting excited at the prospects, I got this feeling that I’ve had enough.
Mobile revolution in banking has reached a ceiling. While developers all over the world are investing more energy in developing even more mobile banking apps, leading banks seem to have gone through a few technology cycles since 2015 to transform themselves into technology companies that are offering the same services as FinTechs.
In 2019, I argued that the essential functions of mobile banking still came down to four familiar tasks:
- Viewing balances
- Reviewing recent transactions
- Paying bills
- Transferring funds
Let’s take stock of where we are now with mobile banking “innovations”:
Personal mobile banking apps that made a splash in 2019
- Chime (US): mobile-only banking with a spending and savings proposition.
- Nubank (Brazil): invoice and spending tools, alongside rewards.
- Mint (US): aggregated financial information and spending-based guidance.
- Revolut (UK): a prepaid card, currency exchange and peer-to-peer payments.
- N26 (Germany): flexible digital money management.
- bunq (Netherlands): a banking proposition with an environmental emphasis.
These app are in all fairness looking to attract different demographics i.e. younger generations that are used to doing as much as they can on their mobile devices.
Business banking apps that made the cut in 2019
Business banking apps such as Tide, Starling, Revolut, Monese, TransferWise, Soldo, Anna, Coconut, Holvi and Kontist focused on business functions, travel or budgeting. These were examples from the 2019 market, not current product recommendations.
2019 offered homogenous banking apps
My criticism was that the same features were repeatedly marketed as innovation:
- Secure signup
- Real-time notifications
- Budgeting and spending analysis
- Instant transfers to friends and family
- Investment advice and scheduled investing goals
Of course everyone expects certain features in a banking app. However, no banking app to date has been able to sell itself on just the most fundamental expectation:
A simple promise that my money will always be there when I need it, just like what I have come to expect from my bank over the years
… the rest of the features are just gimmicks I look at when I have time to browse through the app! After all, how much time do you REALLY spend playing around with your mobile BANKING app?!? (For me, it’s 3 minutes max and I’ve done everything I need to do) Why then have FinTechs been touting the following features as mobile banking app “innovations”?
- Instant transfers
- Fingerprint login and mobile P2P
- Photo-based bill payments
- Facial recognition and expense tracking
- Chatbot customer service
An innovation should be a feature that makes people look at their money in a different way.
What fundamental problem were mobile banking apps trying to solve?
- Personal banking: convenience.
- Business banking: administrative complexity and time spent on routine tasks.
The last 5 years have seen a lot of “challenger banks” (and more are in the pipeline for 2020) and mobile banking apps. What both the personal and business banking mobile apps have managed to do is validate a long-held banking industry secret … it’s all about convincing the customers who to trust.
In 2015 I had a chat with a banking executive about the state of mobile banking. He believed banks would eventually catch up with FinTechs ( either through collaboration or acquisition). Banks have eventually caught up with FinTechs by convincing technology-loving customers (anyone under the age of 50) to buy into their mobile banking apps. In hindsight, the cynical bank executive was right.
So far on offer from FinTechs has been fundamentally homogeneous mobile banking apps with the same gimmicky functions dressed up as innovations.
Technically all I want to do is bank! Whether I do it on a headstand, doing a handstand or riding a bike doesn’t change the fact that all I want to do is get on with banking and be done with it. Mobile banking apps have managed to dress up the fact that they haven’t offered anything new for a while other than window dressing. They are “banks” on smartphones … just waiting to be acquired by actual banks.
Simply offering new services which are accessible via a smartphone only is not transformative.
My Wishes and hopes for 2020 in Banking and mobile banking specifically
2020 Banking Wishes:
I wish someone comes up with a concept that transforms banking the way AOL transformed E-Mail communication
I wish banking for the poor will be placed back on the agenda. More specifically, I wish VCs will start to finally invest in socially inclusive and transformative apps the way M-Pesa completely bypassed the banking structure and allowed the underbanked to conduct commerce in Kenya, Uganda, Tanzania, Afghanistan, South Africa, India, Romania and Albania 2020 Banking Hopes:
I hope 2020 will not bring any more mobile banking apps that attempt to solve imaginary problems. Bottom line is, no one really minds a little inconvenience here are there. As humans we are prone to moan from time to time. So don’t develop mobile banking apps that apparently solve the “inconvenience problem” (only the overindulged seem to think that’s a problem)
I hope more decision-makers at leading banks will increase their willingness to commit to Blockchain and identify a genuine business problem that the technology can resolve. Only then can/should they develop a strategy for delivering a meaningful Blockchain project. Despite all its adoption difficulties, Blockchain has massive potential to transform financial services processes. In Conclusion
There are a lot of smart thinkers and technologists out there!
Let’s start really transforming banking in 2020 rather than treating novelty features as meaningful progress.
A great and innovative mobile banking app in 2020 should mean just 2 things:
The number of people rating an app matters alongside its average rating.
The banking app that has helped millions of users not just offered the most gimmicky features for the few
2020 should start a technological race between banks and FinTechs … that’s the only way, we banking customers will get to benefit, regardless of the generation. They both can offer dedicated, personalized and useful features with high security standards.