The days of people handling all of their financial needs at the local bank branch are fast becoming a relic of a bygone age. While the trend began with the proliferation of ATMs and online banking, it has truly taken off with the development of mobile banking applications. Millions of people now turn to their smartphones for many of their banking needs, and if the current mobile banking trends are any indication, these applications are set to become even more widespread.
Why You Should Be Aware of Upcoming Mobile Banking Trends
Mobile banking apps are fast becoming an essential tool for consumers looking to manage their finances more effectively. According to a recent study by Citi, mobile banking apps rank third behind social media apps and weather apps when it comes to the most used smartphone applications. The same study showed that 46 percent of people increased their mobile banking app usage over the previous year and that nine out of ten of these users preferred using them to visiting a physical bank. For millennials, the results are even more stunning, with 68 percent of them claiming that banking apps could eventually allow their smartphones to replace their wallets altogether.
Given the rapid adoption of online banking applications, it’s critical for organizations to think about how these trends could shape financial services and money management in the near future. Although Facebook caused quite a bit of controversy when it announced plans to promote the Libra cryptocurrency last year, the idea that a social media company would try to push its way into the financial services space shouldn’t have been surprising. While Libra may not be getting off the ground anytime soon, there are plenty of other developments in the future of mobile banking that will continue to affect the way people manage their finances and spend money throughout 2020.
7 Mobile Banking Trends for 2020
1. Mobile App ATM Connectivity
While mobile apps have long made it possible for customers to manage their accounts, new innovations in near-field communications technology and QR code scanning will allow them to interact with banking ATMs more easily than ever. Rather than having to fumble with debit cards and enter passwords in a public setting, users will soon be able to access funds by simply scanning their phone screen or being within close proximity to the ATM.
2. More Biometrics
Multi-factor authentication is fast becoming the standard for security, especially when it comes to financial institutions. The ability of smartphones to capture biometric data like fingerprint scans and facial recognition will become even more sophisticated to provide better protection against fraud and make using mobile banking apps even more intuitive and simple.
3. Voice Commands
Just as voice requests are taking over mobile search and allowing people to access applications without even touching their devices, mobile banking apps are using voice commands to help users obtain the services they need with minimal obstruction. Rather than sifting through multiple menus or searching for the right option, voice commands will allow them to access services faster and more easily.
4. Machine Learning Customer Experience
As more and more people utilize mobile banking apps, financial institutions are able to gather more data about how those services are being used and use that information to improve the overall customer experience. Machine learning algorithms can be used to power bots that help direct people to the services that will address their current needs. Combined with voice technology, machine learning will make the future of mobile banking more responsive and user friendly.
5. Big Data Fraud Prevention
The ability to gather and analyze data about how people use financial products makes it easier than ever to identify inconsistencies that are commonly associated with fraud and identity theft. For instance, if multiple purchases are being made in one state, but the mobile banking app indicates that the device is located in another, the customer’s account can be locked down until the financial institution verifies the purchase. And since messages and notifications can be delivered directly to the app, these potential fraud issues can be resolved quickly and easily.
6. Debt Paydown Services
Online banking has made it easier than ever for people to manage debt. In addition to increasing transparency over their finances, many financial services offer innovative debt payment programs that can be implemented and managed over mobile applications. Not only can they set up regular payments, but they can round up purchases to the nearest dollar and use that remainder to pay down debts.
7. Open Banking
One of the early challenges with mobile banking was the fact that every financial service had its own app, causing their customers to become bogged down with multiple programs. Transferring funds between institutions could be difficult and confusing. Thanks to API technology, however, more providers are embracing an open banking philosophy that allows customers to easily integrate multiple services into a single, centrally managed hub. Rather than fumbling between multiple mobile banking apps, customers can instead use their primary or preferred financial service to manage all of their finances for one portal without sacrificing functionality.
The Role of Data Centers in Mobile Banking Trends
As financial institutions push more online banking applications into the hands of their customers, it’s more important than ever for them to ensure that they’re building these services upon a reliable, rock-solid infrastructure. The stakes are particularly high, both in terms of customer service and security. A few moments of downtime that makes it impossible for a customer to access their funds could cause them to lose faith in their bank and turn to another provider. And it goes without saying that a data breach involving financial information could be a catastrophic event for any bank.
That’s why it’s more important than ever for financial services to partner with data centers that are engineered for perfection. While finding the right combination of space, power, and cooling is crucial when vetting a colocation provider, financial institutions can’t afford to settle for anything less than 100% uptime reliability and full transparency that allows them to monitor the status of their infrastructure. Just as banking customers take their financial data very seriously, their banks must be even more vigilant when it comes to delivering services over mobile banking applications.
About Ernest Sampera
Ernie Sampera is the Chief Marketing Officer at vXchnge. Ernie is responsible for product marketing, external & corporate communications and business development.
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