For mobile banking, the product is the experience

When the COVID-19 pandemic spurred a 30% spike in traffic from mobile devices, First Foundation Bank decided it was time to get serious about that channel.

“In the beginning, mobile was a secondary channel,” explains Lindsay Lawrence, chief operating officer of the $10.2-billion-asset bank based in Southern California. “Our first focus was on the online banking platform, but it was fascinating to watch how human behavior changed. People now essentially live on their phones.”

Recognizing how critical the mobile channel had become, First Foundation designed a new mobile app to deliver a wealth of benefits—from reducing branch operating costs to creating an efficient, engaging customer experience to win their long-term loyalty. The app launched in December.

First Foundation’s mobile initiative looks like a smart bet as customers grow more comfortable with self-service banking.

According to the BAI Banking Outlook for 2022, mobile channel usage is expected to rise in the next three years, which would continue a trend in place since the start of the pandemic. Online banking—primarily conducted on laptop and desktop computers—held steady, while branch banking and drive-up declined slightly in their share of the omnichannel mix.

“The efficiencies that our clientele will gain from a strong mobile app are so important,” Lawrence says. “If we deliver with a user-friendly mobile device, then the amount of branch walk-in traffic goes down, and the number of calls to the call center goes down as well. It obviously helps knock down costs overall.”

A clear finding in the BAI Banking Outlook for 2022 is that mobile matters, particularly for the younger generations. When opening a deposit account, 37% of Gen Z respondents prefer to do so via mobile, compared with just 12% who prefer to use the branch.

John Hanley, senior vice president and senior director of marketing for Equity Bank, says the surge of mobile traffic prompted by the pandemic lockdowns in 2020 has receded. “But we have seen sustained growth in our mobile and digital banking,” he says.

The $5 billion-asset community bank based in Wichita, Kansas has 70 branches in Kansas, Missouri, Arkansas and Oklahoma. Hanley says the bank has struck a healthy balance between branch and digital activity.

“One of the great things about mobile banking is that it makes access easier for customers anywhere in your footprint,” Hanley says. But bankers in the branch are still an important part of the equation.

“People continue to want assistance with making complex financial decisions like buying a home or starting a business,” he says. “They may be starting relationships with us via mobile or digital, but our customers put a high level of trust in our branches in case questions do arise.”

Equity Bank will continue to promote and build value for its mobile channel. “We are always trying to get more digital and mobile usage across our product line,” Hanley says. “We realize that is how people interact with their bank, their insurance company, their phone company.”

Through Equity’s mobile app, customers can access its customer care team via text messaging, email or phone. Hanley estimates about 70% of Equity’s customers use some form of mobile or online banking.

Tom Martin, CEO of Glance Networks, says the “pandemic let the cat out of the bag” when it comes to mobile banking. The Wakefield, Massachusetts-based company creates digital engagement solutions for the banking industry and others.

“The pandemic has accelerated the mobile trend,” Martin says. “You have the shrinkage of modalities as the mobile phone increasingly has become the single point of interface. The phone is never out of the customer’s pocket. You can do messaging and provide a level of engagement that exposes the customer to other parts of the bank.”

The phone brings the bank to the customer. “That makes it more approachable for people who have not wanted to bank with a traditional bank,” Martin says. “Mobile and digital can be a facilitator.”

He adds that a mobile-savvy bank meets customers wherever they are—almost invisibly and without friction. “It’s that level of invisibility that will be the new battlefield for banks. Product, feature and price are no longer the competitive differentiators in banking. It’s the experience.”

Edmund Lawler is a BAI contributing writer.

Gain insights on where mobile banking is headed in “Mobile banking is on the move,” a BAI Executive Report.