The 12 Most Important Mobile Banking Features (And Why No Bank Can Have Them All)

If you need any more proof that the pandemic accelerated consumers’ adoption of digital services, new research from Cornerstone Advisors revealed that more than three-quarters of Americans who have a smartphone are now mobile banking users.

Mobile banking adoption is approaching ubiquity among Gen Zers and Millennials (ages 21 to 40) with 88% of each of the two generations accessing their bank accounts using a mobile device.

The adoption rate dips just a bit to 78% among Gen Xers (41 to 55 years old), and then drops to 57% of Baby Boomers and 41% of smartphone-owning Seniors.

What Mobile Banking Features are Consumers Using?

No big surprise—an overwhelming majority of mobile banking users use the app to check their account balances. Nearly two-thirds transfer money between accounts and pay bills, and roughly four in 10 deposit checks, send money to other people, and view their statements.

Mobile banking features used

Source: Cornerstone Advisors

Which Advanced Mobile Banking Features are Most Important?

Checking account balances, transferring funds, and paying bills are table stakes for mobile banking—every bank and credit union offers these features in their mobile banking app, and the features don’t really provide any competitive advantage or differentiation.

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How To Choose A Mobile Banking Or Personal Finance App

There are three mobile banking features that stand out as the most important features.

Cornerstone asked mobile banking users to rate features on a scale that included critical, important, nice to have, and not important.

Nearly eight in 10 mobile banking users rated managing balance/fraud alerts as either “critical” or “important” features. The second most highly rated feature—by 74% of users—was the ability to turn payment cards on or off, followed closely by the 71% of users who said mobile deposit is a critical or important feature.

Importance of mobile banking features

Source: Cornerstone Advisors

Financial institutions trying to determine which features they should add or build should start by identifying which target market they’re going after—the differences in importance ratings by age group are significant. After the three most popular features, older (i.e., 56+) mobile banking users’ importance ratings drop off significantly from that of younger users.

Importance of mobile banking features by age

Source: Cornerstone Advisors

The Fraud Fear Factor

Since the introduction of the internet, security concerns have slowed digital adoption, whether it’s online shopping, online banking, or online anything. Historically, older consumers have consistently voiced concerns more so than younger consumers have.

It’s different this time around.

The onset of the pandemic forced many consumers to overcome—or ignore—these concerns, but they haven’t gone away. Between 30% and 40% of mobile banking users are “very” concerned about six mobile banking-related fraudulent activities.

Mobile banking-related fraud concerns

Source: Cornerstone Advisors

What’s surprising, however, is that concerns regarding mobile banking-related fraud are nearly similar across generations.

Two New Imperatives For Mobile Banking

For a growing number of consumers, a mobile app is the primary way they interact with their checking account (and, in essence, their bank).

So, as far as these consumers are concerned, the app is the product.

This leads to two imperatives for mobile banking.

Imperative #1: Personalized Mobile Banking Apps

Banks face two challenges:

1. They can’t simply deploy all every feature consumers express an interest in because the result would be a slow, bloated app with features that aren’t used by a significant number of customers, and
2. They can’t just decide to not deploy certain features, because there may be key segments of the customer population who consider those features critical to their banking experience.

Banks have focused their personalization efforts on messages—i.e., personalized offers and “advice” (in quotations because all too often the advice is nothing other than “we think you should buy our products and services”).

Bank customers don’t just want personalized messages (if they want them at all)—they want personalized products. And if the mobile banking app is the product, then the app needs to be personalized.

But today’s mobile banking apps are generic, one-size-fits-all mobile apps.

I can already hear the IT departments complain, arguing that it’s not cost-effective to deploy multiple versions of the mobile banking app or to maintain a number of standalone apps.

But cost-effectiveness isn’t the determining factor here—profitability is.

If the revenue generated for offering personalized bundles in multiple apps exceeds the cost to provides those apps, then banks should do it.

Imperative #2: Designing-In Fraud Assurance

Banks already do plenty to identify and prevent fraudulent activity related to mobile banking—but it clearly hasn’t eliminated consumers’ concerns.

Breach Clarity has an approach banks should take a look at.

The company analyzes every publicly reported US data breach. Based on more than 1,000 factors, it computes a score for each breach and provides consumers with recommendations on what they should do.

Breach Clarity Breach Score

Source: Breach Clarity

What does this have to do with mobile banking?

Breach Clarity is integrating its identity protection services into banks’ mobile banking platforms. Doing so:

• Makes it more convenient for consumers (especially those who use their bank’s mobile banking app multiple times a week) to monitor and respond to data breaches, and
• Enables banks to better personalize recommendations for consumers’ unique risks.

Integrated Identity Theft Protection

Source: Breach Clarity

For banks, it’s more than just doing some nice for their customers—it’s an opportunity to reduce costs for:

• Fraud. Banks spend roughly $40 billion in fraud. Driving more consumers to adopt two-factor authentication and other actions that prevent identity theft, banks should see a reduction in that expense.
• Customer support. Not included in that $40 billion estimate is the cost of supporting consumers who are fraud victims of fraud. One out of every two breach victims has called their bank’s call center for support.

There may be a revenue angle for banks, as well. Although they would incur a fee to integrate Breach Clarity (which could be more than offset by reductions in fraud expenses), customers who upgrade to Breach Clarity’s premium service could generate non-interest income for banks in the form of a revenue share.