Mobile matters when it comes to choosing a bank

Wells Fargo and U.S. Bank, money-center banks with leading-edge mobile technologies, have a strong presence in Iowa. But a small bank operating in the state believes it delivers a customer mobile experience just as rich.

“We’re a nice local bank and offer a lot of services for our customers,” says Amy Wilson, service center supervisor of First Security Bank & Trust in Charles City, Iowa. “We feel we bring some of that big-city technology into northcentral Iowa.”

Wilson says a mobile app with many of the features offered by larger competitors is essential to acquiring and retaining customers for the 120-year-old bank, which has 10 branches and more than $600 million in assets.

One of the app’s most popular features is mobile deposit, which rose sharply in popularity at the height of the pandemic, when customers could not visit a branch. This feature is particularly popular with so-called snowbirds—older Iowans who venture south to warmer weather in the winter. At the other end of the generational spectrum are students who go away to college and tap the app’s mobile banking capabilities when they’re far from home.

Since launching, First Security’s mobile app has evolved to incorporate functions that were originally distinct. For example, the debit card management function used to be a separate app, but it has been rolled in with the other features.

Bradwin Roper, CEO of FNB Connect, a South African mobile virtual network operator (MVNO), has attracted nearly 900,000 customers since its start in 2015. FNB was a finalist in BAI’s 2022 Global Innovation Awards for being the first banking institution in Africa to fully integrate telecommunication services and devices into a banking app.

FNB’s app is particularly attractive to Gen Z and millennial customers and prospects, Roper says. “What younger consumers also want is a trusted advisor who can recommend the best plan, what’s the best banking solution and what should they do with the money they have saved. We keep our mobile customers by educating them on the tools of the app and the device itself to improve their digital literacy and skills.

A mobile app that does everything, everywhere, all at once may be banking’s Holy Grail. The so-called “super app” will be so comprehensive that it will not only essentially become the bank but also serve as a central hub for broader features such as hailing a ride, ordering dinner or booking a hotel room.

Gopi Billa, a principal with Deloitte Consulting in New York City, predicts that super apps will arrive in the United States by 2025. They’re already a reality in parts of Asia, where populations are younger and more digitally savvy. That said, Billa doubts that the banking industry will command the super-app ecosystem in the United States.

“Banking and insurance-related services are likely to play key roles in super-app functionality, but traditional banks are not structured to deliver a technically robust solution compared to big tech competitors,” according to Billa.

A bank nimble enough to successfully develop a super app that melds a variety of customer experiences would gain valuable cross-selling advantages, he says. “The more the customer spends time on your bank’s platform, the more the engagement. Attention is likely to be higher.”

But Billa says there’s a big caveat: The services on the super app may resist sharing customer data with the bank that developed the app, which may make it more challenging to acquire those customers.

The lockdowns in the early days of the pandemic drove everyone, including seniors, onto mobile and online platforms, he says. Although it was a forced march, older generations discovered the convenience of mobile apps and continue to embrace them.

Acquiring new customers is bankers’ top challenge, according to the BAI Banking Outlook: Trends in 2023 report. The same study found that more than 55% of consumer respondents would switch institutions for a better mobile banking app or digital capabilities, up significantly from a year earlier.

“The mobile experience has really grown,” says Wilson, who has had roles in data services and loan operations during her 11-year career at First Security Bank and Trust in Iowa. “Everybody wants to be able to do things faster, quicker, better.”

Edmund Lawler is a BAI contributing writer.

We explore the current state of mobile banking—including the quest to improve the day-to-day user experience and protect customers from fraud—in the BAI Executive Report, “Building on mobile banking’s success.”