Analytics from Juniper Research predicts that there will be two billion mobile banking users by 2020. Mobile users already exceed the number of stationary, desktop connections. In developing countries, the first banking experience for many is through a mobile device.
There is a need to increase mobile banking security through better authentication systems. Banks must deal with increasingly complex regulatory compliance. Cloud-based applications expand possibilities. Encrypted blockchain ledgers may help reduce fraud. There remain many challenges; however, there are extraordinary opportunities in online banking.
Best Mobile Banking Trends for Future
The current global banking strategy is to market online banking using mobile devices and apps like major international brands. The global banking strategy for major institutions is focused on improving the customer experience using mobile devices and innovation with these top 22 mobile banking trends.
1. Open Banking
A strong regulatory change called “Open Banking” is happening in Europe, the US, the UK, and Australia. This regulatory change allows customers the opportunity to share their banking information with third parties. Open Banking permits many innovative fintech offerings to be offered to mobile customers from a variety of start-ups as well as established online systems that are not banks, such as major online retailers.
2. Mobile-Only Banks
The megatrends include mobile-only banks with non-stop convenience, improved customer experience using chatbots, personalization through artificial intelligence algorithms, and bundled product offerings.
3. Non-Traditional Banks and Social Responsibility
There is a continued expansion of the marketing of mobile Fintech services plus other innovations expected in 2020. Along with these mobile banking trends, there are increased opportunities for e-commerce in banking.
A growing number of Fintech start-ups promote social awareness along with corporate social responsibility that is aggressively advertised, promoted, and explained to its customers for powerful market differentiation.
4. Instant Credit Decisions
Micro-lending of amounts up to a few thousand dollars, which is like a payday loan, is now available via mobile apps that give instant credit decisions without needing to verify credit history.
Access to the direct deposit information of payroll payments is all that is needed to verify an applicant’s ability to repay the loan. Decisions are made in seconds with the funds immediately made available for approved borrowers.
5. Peer-to-Peer Lending
Disintermediation that is occurring now is removing the banks as the intermediary in some lending transactions. Through peer-to-peer lending, individuals lend directly to each other via a mobile app.
6. Artificial Intelligence
The expansion of the use of artificial intelligence (AI) is increasing in mobile banking. AI is used to improve fraud detection and provide mobile notifications about suspicious account activity.
AI natural language processing provides better customer service using chatbots. New revenue sources come from AI-driven advisory services that are paid subscription services, which offer budget management, diverse Fintech products, and investment recommendations.
AI-driven chatbots are very popular for mobile banking and continue to improve. The trend for 2020 is to integrate the banking system chatbots with social media messaging systems for wider consumer deployment. This is also a marketing tactic that increases new customer acquisition levels at lower costs.
8. Data Mining and Geo-Locating for Relevance
Mobile connections come with GPS location information and provide customer-tracking information that becomes part of the Big Data available for data mining using AI programming. Mobile banking systems use this to present offerings to customers that are relevant to their needs and that are geo-located to where they are using their mobile device.
9. Augmented Reality
A popular mobile app allows a user to hold up a smartphone, take a live image capture of the street and then the augmented-reality app shows the user where the nearest bank branch or ATM is physically located. The app provides a map as an augmented overlay of the image captured on the phone along with guidance needed about how to get to the desired location.
10. Location Technology (Beacons)
Beacon technology is used to determine a mobile user’s physical location in more precise ways. This will be further enhanced by the deployment of 5G mobile network technology.
11. Voice Banking
Vocal pattern recognition for authentication and transaction processing combined with AI-driven natural language programming is a natural expansion of using a personal assistant device in the home and mobile devices.
12. Touchless Transactions
Holding up a mobile phone with a Q-code on the screen is already a popular way to authenticate a person for a touchless transaction. This trend will expand.
13. Human Digital Banking
A surprising trend is the increased use of humans who serve as a personal human banker for VIP customers. One person in this position for a bank can manage thousands of accounts using AI programming assistance and make direct contact with each customer via their mobile phones.
14. Internet of Things
The Internet of Things (IoT) is bringing billions of newly connected devices online. Smart home technology connected to mobile phones can automate banking transactions. For example, when programmed to do so, a smart refrigerator can automatically place orders for things needed to be resupplied.
15. Mobile Digital Wallet Usage
Cryptocurrencies are making inroads into being more accepted for payments. Mobile banking will include management of a secure digital wallet for cryptocurrency transactions.
16. Cloud-Based Mobile Apps
The migration to the cloud continues unabated. Along with Open Banking, cloud-based Fintech services, which run as applications on the cloud, will enable a surge of innovation in mobile banking.
17. App Convergence
Mobile users are looking for each mobile app to do more than one thing. Rather than have multiple apps on their phones to do a variety of different functions, the strong trend is for choosing an app that does many things.
A single master app that does multiple functions is vastly preferred by most consumers. Instant messenger apps on social media are leading this trend of mobile app convergence.
18. API Integration
APIs allow communication between many systems. Along with app convergence, the trend is for applications to integrate with many APIs to enable easier interconnectivity between systems.
19. Integration with Social Messaging
Consumers are far less likely to download a company’s specific application, even if free to use than they are to find a chatbot from that company, which is integrated with a major social media messaging system such as Facebook Messenger.
20. ATM Usage by Mobile App
A secure mobile app can replace the need for having to physically insert a bank card into an ATM to get cash. The mobile device substitutes for the bank card. Consumers are rapidly embracing the use of their mobile devices for such transactions.
21. Biometric Authentication
Mobile devices are increasingly able to use biometrics such as fingerprints, facial recognition, and retinal/iris scans for identification and authentication of a transaction.
22. Early Identification Verification
This is a technique to identify an authorized user with a mobile device based on historical patterns of physical activity that are monitored and kept in a database for data mining by AI programming algorithms.
The usefulness of these systems is that the person who matches a regular physical pattern is identified before they attempt a transaction. The system recognizes them before they need to be identified for an authorized transaction.
The banking industry was one of the first major sectors to embrace mobile technology. Innovation continues with more fintech offerings that are no longer restricted by the classical definition of traditional banking.
In 2021 and beyond, these trends will continue to improve the consumer experience not only in developed countries but in developing countries as well, where more billions of people are currently “unbanked.” Those billions of new customers will join the two billion existing mobile banking customers in the future.