Increasing share of wallet hinges on increasing the perceived value of services for bank customers and credit unions members. Beyond providing a simple repository for their money, depositors are looking to financial institutions for assistance with money management, and mobile banking tools are a terrific way to engage with customers in a way that adds value and deepens the customer relationship.
In a recent blog post, bank marketing strategist Jim Marous wrote:
Beyond simple balance and transaction updates, alerts can provide the foundation for greater interaction with your customers, increasing engagement, lowering servicing costs and even providing potential revenue opportunities.
Mobile banks alerts have become an important component of money management. Smartphone-savvy consumers are relying on mobile alerts to provide instant feedback about their spending habits, alerting them to low balances and pending transactions. Customers expect banks to respond to them in real-time, just as they live the rest of their digital lives from moment to moment, which presents a new revenue opportunity for banks and credit unions.
As Jim notes, a Javelin Strategy and Research study indicates that only 34 percent of consumers currently receive bank alerts via email or text, and that number will only grow by about 4 percent through 2016. Javelin also indicates that text alerts are the fastest growing delivery channel, which shows consumers are looking for to supplement email with something more immediate. And more users are downloading mobile apps (about 50 percent) in addition to looking for push alerts. Clearly customers are looking for more from their mobile banking experience than alerts and balance verification.
Not surprisingly, the larger institutions are gaining more ground with mobile apps. Institutions like Bank of America and Chase are actively promoting mobile banking ,which helps instill greater consumer loyalty while promoting savings for the banks by reducing paper processes and branch visits. Community banks and credit unions are behind, and fewer offer the same level of mobile service or comprehensive mobile apps.
Which means there is more room for opportunity. Our research shows that a number of mobile alerts and services are valued by customers; that they want these services and are willing to pay for them. Identity theft alerts, for example, are in high demand with a growth potential of 70.8 percent. Low-balance alerts have a growth potential of 55.7 percent. Mobile photo bill pay could grow 48.8 percent. And mobile deposit services 46.0 percent. And each service is valued at an average of $3.30 and up, or when bundled in the right way, consumers indicate they are willing to pay $10 or more for these mobile services.
This is where the smaller institutions have an opportunity to compete more effectively. By offering the right mobile services in the right bundles, banks and credit unions can better serve their customers with tools that help them manage their money. At the same time, these services deepen the customer relationship and promote customer loyalty. And consumers are willing to pay for these services for added revenue.
Mobile banking services are growing in popularity and importance, and the institutions that figure out how to connect with customers with better mobile services are the ones who will be able to compete more effectively.