Managing Money

Technology Trends Leading the Way in Mobile Banking

by Kate Ashford January 07, 2019

The tech landscape today looks pretty different than it did even a few years ago.

It’s now common to rent someone’s home for your vacation via a website, eschew a traditional office for a shared co-working space and juggle several jobs remotely as part of the gig economy.

You can bank in the elevator or transfer funds right from your kitchen table and this added convenience is the draw, according to new research from Citi. The Citi Smarter Connections Research Study found that new financial technology innovations — like international money transfers and security features — are having a growing impact on the adoption and sophistication of mobile and digital banking.  

illustration showing that 63% of people have never heard of Financial technology, 24% have hear of it, but are not sure what it is; and 13% know exactly what it is. Statistics provided by Citi Smarter Connections Research Study 2017

Now trending: banking apps


Maybe you call it mobile banking. Perhaps you’re using a bank app and just call it convenient. More clearly defined, mobile banking is anything that merges financial services and technology — known as fintech — including payment tech, stock trading apps, automated investing, peer-to-peer lending, retail banking and insurance.

Although consumers are big users of fintech, they don't realize it. “The number one consideration that consumers now have when choosing a bank or deciding to stay with a bank is the digital capabilities that institution has,” says Ryan Jandris, vice president of digital banking at financial services tech firm Fiserv. “Consumers are expecting an experience that is simple and intuitive, with an engaging, interactive design that allows them to manage their financial life and their bank relationship through the digital channel.”

Illustration showing that life events such as marriage, retirement, graduation, new job, starting a business, and buying a home are all what drives people to use mobile banking. Statistics provided by Citi Smarter Connections Research Study 2017

How mobile banking is evolving


Not only is banking online easy, but it can save people significant time. “I think it’s pretty common now that you can turn your [credit or debit] card on and off via your mobile banking app,” says Mary Wisniewski, a reporter and analyst with Bankrate. “But I think we’ll see more mobile banking features related to controlling our payment data in other ways.”

Some banking apps can show you where you've shared your payment data, such as your gym membership. Other capabilities may include setting spending limits, changing PINs, and establishing travel alerts if you’re leaving the country — all things you previously couldn’t do without calling someone or visiting a branch.

“The next frontier is bringing more involved transactions to the mobile device,” Jandris says. This means customers can now open more products, such as mobile apps, checking and savings accounts, auto loans and even home equity lines of credit, directly though their mobile app.

illustration showing the top uses of mobile banking in the US: 18% for payments, 17% for checking accounts, 13% for savings, 7% for investments, 7% for personal loans, 5% for financial account management, 5% for mortgages. Information provided by Citi Smarter Connections Research Study 2017

Biometrics and other advances in security


“Historically, security has centered around information the customer could provide: login ID, password, and perhaps security questions,” Jandris says. “Biometrics adds a different element because it relies not on known information, but on a unique feature of who someone is. Biometrics help verify that the customer is the one performing the transaction.” 

Of course, not all devices offer advanced features like fingerprint and facial recognition technology. Behind the scenes, banks and app makers are trying to partner with the aim of making people’s data more secure. One way, says Wisniewski, is to avoid having consumers share their bank username and password to use these services.

Voice biometrics that analyze emotion and intent during an interaction by comparing the customer’s voice to previous transactions are in the pipeline. “Banks could also match voice prints to reduce fraud in situations when someone else is attempting to represent the customer,” Jandris says.

illustration showing why people are skeptical of using mobile banking due to security concerns. Statistics provided by Citi Smarter Connections Research Study 2017

New innovations are boosting interest


Artificial intelligence is on the rise, as companies use A.I. to handle more customer interactions. Chatbots that can help customers with basic account questions and payments are quickly becoming the norm. And newer payment applications cater to things like international money transfers and digital currencies.

Technology that categorizes your spending or offers insights into your money habits is also poised to become an automatic feature. “The mobile device would be more of a financial advocate for the customer instead of just being a device where I can deposit money and look up how much I have,” says Jandris. “Now it’s a tool.”

Globally, the Citi Smarter Connections Research Study found that the U.S. is more mature than other fintech markets, but there's room for improvement everywhere. While people in Singapore are far more likely to use mobile payment technology, they're less likely to use fintech for things like savings and investments. And in Australia, use of mobile banking is low overall. Convenience is cited as the most important factor, and the functionality of mobile banking gets better with every day.

It’s now possible to do almost anything you’d do in a bank branch on a mobile app instead, putting time and savings right back in your hands.
 

Kate Ashford’s work has appeared in Money, Parents and Forbes.com. 
 

 

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees and we do not guarantee the accuracy or completeness of the information presented in the article.