Consumers are growing tired of using multiple financial apps, a new MX study found, underlining the importance of banks making their own app stand out and avoid deletion. Here’s how banks like First Foundation, Ally, and U.S. Bank have boosted engagement.
The dizzying number of financial apps on their phones — one for their bank, one for their budgeting app, another for paying their friends, the list goes on — is wearing consumers down.
And users appear to be slimming down, according to a new survey from MX. This app consolidation can be a challenge for banks and credit unions who must take steps to ensure their customers don’t delete their app and head elsewhere.
But it also points to opportunities for the industry, as customers are increasingly open to sharing their data if it means they can get more personalized advice and tools in one app.
Roughly 55% of U.S. consumers said they’d agree to share more data to get a better experience — up sharply from 46% last year, MX found in its survey of more than 1,000 adults.
“They want to bring all of that together and have solutions that can meet them where they are, instead of them having to go to multiple places,” says Jessica Kendall, senior director at MX who authored the study.
Doing so isn’t easy. Technology budgets are never as big as executives dream, forcing even big banks to pick and choose which tools to deliver that their customers want.
Building Personalized Engagement Without the Cringe Factor
Banks of all sizes are finding ways to keep customers engaged, with executives working to strike the right balance between offering personalized insights without seeming either cringy or intrusive.
For First Foundation Bank., a $12.6 billion-asset bank in Dallas with roots in California, that meant finding the right partner that delivers superior technology and lets the bank easily customize tools for its customers.
The bank was bringing in new deposit customers looking for higher-yielding savings options — but keeping those customers meant building better ways for them to track their spending, see their accounts elsewhere, and get personalized tips.
“We knew if we wanted to get into the digital bank space and be successful, we needed a better mobile app,” says Jimmy Ton, senior vice president and director of digital channels at First Foundation Bank. “We needed a better mobile experience, and we needed better tools for those clients to really engage with us. That’s why we chose to work with MX.”
Two-thirds of consumers agreed they expect their financial provider to know them, a large jump from 54% last year. And they want more tools to help them achieve financial wellness.
But what financial wellness means varies depending on the consumer. About half of those surveyed defined financial wellness as paying bills on time and covering everyday expenses, the MX study found. The other half looked a bit more for the future, defining wellness as being able to have a safety net if emergencies pop up or saving for retirement.
“For some people, it’s a very tactical concept. For some people, it’s a much longer-term concept,” says Carrie Sumlin, executive director of digital product experiences at Ally Financial, the auto lender and digital bank.
Ally is mindful of how it communicates with both buckets, Sumlin says, including by offering a glass-half-full perspective that looks to encourage customers rather than draw them away.
And financial avoidance is more prevalent than banks might like — more than 1 in 5 consumers told MX they avoid checking their finances if they can. Younger generations are more likely to stay away from checking their balances, with 28% of Millennials and 33% of Gen Z customers saying so.
Ally lets customers control what order they want at the top of their financial dashboards, which may include updates on how well they’re doing in saving money toward their goals. Those with Ally auto loans may choose to put a tracker that tells them how close they’ve gotten to paying off their car at the top.
“That sort of encouragement, I think, goes a long way,” Sumlin says. “Even if it’s subtle, it creates a more positive experience.”
Minneapolis-based U.S. Bancorp also lets customers set savings goals, automatically add to them, and track their progress. Whether through digital channels or in branches, the bank tries to offer customers a “holistic financial view” that offers personalized recommendations, says Ankit Bhatt, the company’s chief digital officer for consumer banking.
That’s all due to a growing expectation from customers that U.S. Bank can “help them achieve whatever it is that they need to get done” with their financial goals, he says.
“It wasn’t enough for U.S. Bank to just personalize the experience,” he says. “They actually wanted us to anticipate their needs.”
That means, for example, analyzing their cash flows to suggest they can save a little more than month, or floating a credit card that would’ve fetched more rewards and that customers are pre-approved for already.
Balancing a Full Menu of Options with Earning Customer Trust
All of these examples focus on delivering more of what consumers want. And, consumers are no longer clamoring for just one feature, the MX study found but instead want the full menu of options. They want to track all their accounts in one place, get reminders about paying bills or saving money, save money automatically with round-up tools, see their spending breakdowns, set up goals, get educational programming, and use debt repayment trackers.
But the pillar remains earning customers’ trust with their data, both in keeping it safe and using it responsibly to personalize their experience.
While consumers are open to sharing their data — a critical finding if the Consumer Financial Protection Bureau’s new open banking rule stays in place, 55% worried over which financial providers can access it.
The CFPB is in limbo as new leaders under the Trump administration lay off employees and scale back its work.
But “open banking is here, and it has been for a long time,” says Kendall, the MX study author. The industry has been shifting away from its longstanding screen-scraping approach toward APIs that, with customers’ consent, can plug into different providers’ systems in a more seamless and secure way.
Those tools can give banks a “clear competitive advantage” as they look to stand out, she says.
“Regardless of what’s going to happen with regulation, open banking is already here, and you should be thinking about how to implement it if you have not already,” she says.
Source: THE FINANCIAL BRAND
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