Visa Consulting & Analytics

Opinion paper

Mobile banking app

How to drive customer adoption and engagement

© 2019 Visa. All Rights Reserved.

Great mobile banking apps happen by design
The effective provision of a bank’s services through a mobile device is increasingly becoming a cornerstone
of a bank’s value proposition. Many customers across the world now rely on mobile for some, or all, of their
everyday banking needs, and consumer demand for mobile banking shows no sign of slowing.

This evolution presents banks with both challenges and opportunities, and this opinion paper highlights
best practices for consideration that will drive customer adoption and engagement. Drawn from experience
gained through the many projects that Visa has undertaken in this space, it provides banks with real “food for
thought” when evolving their mobile banking app offering. Key messages include:

• Meet the customer’s everyday banking needs, such as paying bills, transferring funds and budgeting

• Ensure the customer’s experience is a frictionless one; drive stickiness via top notch user experience
and user-friendly interfaces, while keeping the highest security standard to provide the customer with
control over their finances

• Build value through using customer data to drive lifestyle services that deepen the customer
relationship

• Develop use cases and converge underlying functionalities leveraging on new innovative factors to
differentiate from the competition

• Identify and track mobile app KPIs and user in-app behavior to get a data-driven view on further app
development

To address these areas and create a market leading mobile banking app requires a systematic and analytical
approach. What is required for each customer “use case” needs to be defined, and existing capabilities available
in the market need to be harnessed, to build the solution that is needed.

Developing a mobile banking app that delights customers and provides a real competitive advantage requires
a sustained investment; there are few shortcuts to success. But with customer demand and expectations for
a quality mobile banking service continually rising, delivering what the customer requires is likely to be a
key determinant of future bank performance.

2 Visa Consulting & Analytics Visa Public

Mobile is increasingly the customer’s channel
of choice around the globe
Multiple global reports are proving that more and more customers are using their mobile to carry out their banking.
“The state of mobile 2019, App Annie” is one of the reports showing the dynamics of mobile banking adoption, namely
+10-35% growth of average weekly sessions per user.1

The average user checks their bank account on mobile nearly daily in 2018, up 35%
From 2016 along with the growth of average weekly sessions per user at 10-35%:1

Average Weekly Sessions Per User

In Top 5 Retail Banking Apps1

2016 2018
United Kingdom 5.7 7.2
Brazil 6 6.5
Canada 5.2 6.2
France 5 6.2
South Korea 4.2 5.8
Germany 4.6 5.2
United States 3.8 4.3
India 3 4.2
Japan 2.1 2.3
Note: Android phone: Top 5 by MAU (Monthly Active Users), Worldwide average is top 10 by MAU

Many are using mobile apps alongside branch and desktop banking, choosing the channel that works best
for them for the action they wish to take. For some, mobile is complementing, rather than replacing, their use of
other banking channels.

While for others, mobile meets all their banking needs and some have made the leap to “mobile only” banking.
Business Insider report found that 70% of mobile banking users in the US call the channel the primary method they
use to conduct banking.2 According to an Optima Consultancy report, mobile app was the channel of choice for
39% of customers in 2018.3

1.App Annie Content. (2020). The State of Mobile 2019 - App Annie. Available at: https://www.appannie.com/en/go/state-of-mobile-2019/.
2. Mobile Banking Competitive Edge, November 2018. These are the top 20 US banks ranked by the mobile banking features consumers value
most. Business Insider. Available at: https://www.businessinsider.com/the-mobile-banking-competitive-edge-report-2018-11?r=US&IR=T.
3. Optima Consultancy report. (2019). UK, Mobile Banking App Review 2019. Available at: https://www.optima-consultancy.com/Bankapp19.

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This evolution in banking has been led by the customer and in some digitally mature markets, mobile banking
has become mainstream:

97% of the influential Global downloads of finance apps In 2018, the worldwide
millennial customer hit 3.4B in 2018, up 75% from 2016. average sessions per user
segment use mobile Emerging markets like Brazil, India in the top 10 applications
banking in US.4 and Indonesia saw the strongest by Monthly Active Users
growth in app downloads from was 7x a week, with a
2016 to 2018. Notably, Indonesia significant difference
experienced nearly 400% growth in among markets i.e. 2x a
finance app downloads from 2016.5 week in Japan and 10x a
week in Australia.5
And this change in how people bank is also happening in developing financial services markets, where the
convenience of mobile is attractive to mass segments driven by millennials.

“Mobile only” banks or “challenger banks” are driving standards and customer expectations in mobile banking, where
traditional banks are usually followers as their capabilities are often limited with their existing infrastructure. Thus,
traditional banks address customer expectations by creating separate “mobile only” services. These offerings are
segment focused, be it for young, tech-savvy or affluent customers, such as DBS (Digibank), Emirates NBD (Liv), or
UniCredit (Buddybank), through to new standalone banks such as Revolut (UK), Starling Bank (UK), Moven (U.S.)
and Monzo (UK).

These new offerings deliver a more bespoke digital banking experience thanks to a nimble infrastructure
based on innovative technologies and without integrations with multiple legacy systems, unlocking
multiple benefits:
• Meet customers’ expectations with mobile-first approach to functionalities development, stable
platform and constant improvements
• Drive engagement through the channel the customer wants to use with compelling features
• Use customer data more effectively to evolve personalization via targeted customer offerings and
meaningful insights via money management tools
• Respond more quickly to evolving customer needs
• Deliver much more cost-effectively and drive down their operational costs
• Create essential “data” to mine and enable a more “predictive” approach to offering customers relevant
products and services.

Getting the customer proposition right through a channel that is still in its early years is challenging, and not
every “mobile only” player delivers what the customer wants the first time. Acting on customer feedback by
evolving the proposition so that it better meets their needs is vitally important, as there are now a number of
“mobile only” propositions for the customer to choose from.
4.
Mobile Banking Competitive Edge, November 2018. These are the top 20 US banks ranked by the mobile banking features consumers value most.
Business Insider. Available at: https://www.businessinsider.com/the-mobile-banking-competitive-edge-report-2018-11?r=US&IR=T.
5. App Annie Content. (2020). The State of Mobile 2019 - App Annie. Available at: https://www.appannie.com/en/go/state-of-mobile-2019/.

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Focus on meeting customers’ everyday banking
needs through your mobile banking app
For many consumers, banking revolves around The need to be able to carry out these regular
simple money management, such as budgeting, financial transactions when it’s convenient is why
making payments for purchases and paying their mobile banking is growing so quickly. Research
regular bills. It is a necessary task that they want to carried out in the U.K. demonstrates that there are a
spend as little time as possible doing, and undertake small set of services which will meet the core needs
when it’s most convenient. of most users.6

Three main functions will cover the needs of most users

76% 62% 68%

of mobile banking users of mobile banking users pay of mobile banking users make
check their account balance bills through the service.6 account transfers through
with the service.6 the service.6

Further studies, conducted by Forrester in November Thus, mobile banking functionalities are expected
20177 (covering 13 leading European banks) and by to be expanded with self-service features leading to
Business Insider in November 2018 (covering 20 US cost optimization and customer satisfaction.
banks), assessed how mobile apps are meeting the
needs of their customers.8
While each of the banks reviewed
Both studies found that most of the banks offered in both studies did different things
high level features for everyday banking tasks and
transactions, and allowed customers to apply for well, there were a wide range of
products online. The majority of banks fell short best practices that digital teams at
when it came to directing customers towards self-
service help.
all banks could learn from.

6.Juniper Research. (2017). Mobile Banking Consumer Insights. Available at: https://www.juniperresearch.com/press/press-releases/digital-banking-users-to-reach-2-billion.
7.Forrester. (2017). European Online Banking Functionality Benchmark.
Available at: https://www.forrester.com/report/2017+European+Online+Banking+Functionality+Benchmark/-/E-RES139794.
8. Mobile Banking Competitive Edge, November 2018. These are the top 20 US banks ranked by the mobile banking features consumers value most.

Business Insider. Available at: https://www.businessinsider.com/the-mobile-banking-competitive-edge-report-2018-11?r=US&IR=T.

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Differentiate from the competition by leveraging new,
innovative features
As mobile banking became a main channel for retail customers, it is now well-positioned as a front-end
for various emerging technologies and for new use cases:

1 2 3

Big Data and Data Analytics Artificial intelligence and Open API architecture
capabilities combined with the machine learning unlock enables ecosystem
immediate accessibility to the advanced functionalities development and rapid
customer through their mobile appealing to growing millennial evolvement leading to new
app, create an opportunity to segments, i.e. robo-advisors and business models on both
provide timely and relevant virtual assistants to eventually PSD2 regulated and non-
personal offers, travel advice, or provide personalized financial regulated markets naturally
help the customer earlier in their advice to customers in a way embedded into a mobile app.
buying process. that would be too expensive
with human employees.

However, the usage of some of the features built based on new innovative factors is still limited due to privacy
concerns. For example, the number one reason consumers avoided voice-based payments was unease about
the safety of that behavior, according to a 2017 Business Insider Intelligence survey.9

9.
Business Insider. (2020). Business Insider Intelligence Survey 2017.
Available at: https://www.businessinsider.com/public-trust-news-digital-platforms-slid-2017-2018-1?r=US&IR=T.

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Banks employing best practices have a quick, easy to use
and secure mobile banking app allowing customers to
control their finances
In payments, it is often said that the best experience is a frictionless one. Mobile banking must be exactly the same –
you must analyze, assess and remove any point of drop-out or friction that will result in the customer not using this
channel. The risk is that the customer returns to another channel which is more expensive to service, or decides to
move to another bank due to a better digital experience being offered elsewhere.

When developing or redesigning your app, it makes sense to do so against an assessment framework that will
ensure you deliver what the customer wants. Functionalities, UI/UX and Security are three essential words in the
digital banking world.

Effective mobile apps design criteria

Functionalities: Ensuring UI/UX: Enabling an action Security: Ensuring both

important features for to be completed as easily, technical security and the
daily banking and self- and as quickly as possible perception of security
service are in place

Mobile app stability, log-in speed and agile approach to releases are the other angles to be considered when
building the app. Monzo (UK) and Starling Bank (UK) are good examples in terms of app stability, frequency of
updates and log-in time:

• Reported less incidents affecting mobile banking than traditional HSBC and Nationwide.10
• Managed to update their apps more than 40x in 2018 comparing to less than 10x for HSBC
and Nationwide.10
• Kept log-in time at level of five seconds or less.10

Furthermore, as Optima Consultancy research shows, there is a correlation between challenger and traditional
banks’ technology aspects and business success, as examples Monzo (UK) and Starling Bank (UK) have gained
almost 11 and nine new customers for every one lost respectively (Current Account Switching Service),
compared to Nationwide and HSBC, who managed to gain four and two new customers respectively.10

Therefore, we have observed that synergies of challenger banks’ business approach and technologies drive
customers acquisition.

10.
Optima Consultancy report. (2019). UK, Mobile Banking App Review 2019 Available at: https://www.optima-consultancy.com/Bankapp19.

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Business benefits are maximized by applying a strong
customer focus while designing your mobile banking app

Base approach and functionalities

Your focus should be on creating genuine reasons for the customer to use your app for popular use cases,
such as paying bills or checking balances. Building, or redesigning, your app from the ground up is key to
ensure that the customer experience is right for this unique channel, rather than it simply reflecting a modified
version of your customer’s online portal experience.

Across various reports and our own Visa Consulting & Analytics experience with the banks, we have observed
that “mobile-native experience” and basic functionalities are often implemented or already in digital teams’
backlog, especially in markets with strong digital banking leaders. Nevertheless, we have observed several
directions that definitely require more focus from middle and senior management:

• Redesign of UI/UX, upgrade from an already obsolete experience and interface of mobile apps created in
early 2010s
• Digital sales via mobile app to accommodate a growing customer appetite for easy and seamless access
to new products
• Competitive advantages identification based on value-added services naturally embedded into
customer’s experience (i.e. Personal Financial Management, lifestyle, marketplaces).

Unlocking competitive advantages of your mobile banking

Visa Consulting & Analytics has identified five directions to be considered for getting competitive advantages:

• Money management/PFM • Robo-advisors/virtual assistant/chatbot

• Payments/transfers • Open banking/ecosystems
• Lifestyle services

8 Visa Consulting & Analytics

For your convenience, we have summarized the top areas of focus along with use cases which will
provide your bank with the most benefits and help you to stand out in the crowd.

Use Cases Business Rationale Examples

1. Money Management/PFM

• Budgeting, forecasting and • PFM features are appealing

personal insights are the one of the to the millennials segment, driving
main differentiators for challenger stickiness to the app and
banks as they provide meaningful addressing customer expectations.
insights by working with data better By helping customers achieve their
and ensuring improved financial goals, banks stand to make
visualization. their services more attractive.

2. Payments/Transfers

• Convenient and fast payments, • Must-have functionalities

like person-to-person payments, contributing not only to revenues,
unlocked several anchor use cases but to “top of mobile” as well.
like Near Me payments (i.e. QR,
Shake2Pay) combined with Split Bill
features or transfers via mobile
phone number/ social media.

3. Lifestyle Services

• Additional services provided • Lifestyle services have direct

via separate apps (or traditional impact on tenure and thus increase
channels) to specific customer Customer Lifetime Value.
segments (typically Affluent);
services can include Concierge,
Trading, Lifestyle, etc.
• Develop personalized set of data
driven triggers (i.e. merchant offers,
information, card related activities)
embedded in the bank app, and
delivered by push notification.

4. Robo-advisors/Virtual Assistant/Chatbot

• New robo-advisory solutions • These features are widely used to

start from PFM to provide digital provide support to underserved
automatic investment solutions to segments and to offer better
customers and advisors. customer service at reduced cost.
• Supplementing mobile banking
with chatbot offers the possibility to
perform multiple activities using
this platform integration.

Disclaimer - All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply
product endorsement or affiliation with Visa.
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 Use Cases Business Rationale Examples

5. Open Banking/Ecosystems

• Multiple use cases across different • Preliminary benefits for banks are
directions, including: marketplace API monetization, external
for companies to use APIs to software development, access to
build services, aggregators of financial data and easy access to
financial data for credit scoring or new products/capabilities.
effective PFM building.

Disclaimer - All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply
product endorsement or affiliation with Visa.

Analysis of the above mentioned areas along with the bank’s positioning in the market should eventually lead to
the identification of relevant use cases. Customers must be convinced in the first place to try the new features
and have a positive first experience. Then to ensure that the customer increasingly uses the features, the bank
should properly analyze customer behavior and designated KPIs, as these will provide insights into which
features are being adopted by the customer. Combined with the Customer Satisfaction Index measurement for
particular features, customer feedback is key for the bank to evolve the mobile app in the right direction.

Single mobile app or multiple dedicated apps for different segments

and services?
Running projects for our customers across different regions, we often participate in discussions on a single
mobile app vs. multiple dedicated apps.

We have observed that cases with multiple dedicated apps are often focused on specific segments (i.e.
affluent) or products and services (i.e. trading, lifestyle, concierge, etc) to capture specific needs (i.e. Emirates
NBD with Liv, or UniCredit with Buddybank).

However, single mobile apps converging offers and functionalities in a unique environment is also often
used. Recent examples are Chase (US) announced preparations to sunset its Finn application and instead
merge it with the Chase mobile app. First Direct (UK) retired their stand-alone Artha app with the aim of
including the functionality within their primary banking app.

Providing access to services beyond traditional banking in a single application is another approach tested by
the banks investing into ecosystem development, where possible use cases may vary from built-in
marketplaces to buying cinema tickets, booking restaurants and even ordering food via the mobile banking
app.

10 Visa Consulting & Analytics

Partner for Progress – no need to build everything yourself
Long gone are the days when banks have to develop and build all the capability they offer to customers.
Instead, focus your efforts on defining exactly what is needed to provide the optimal customer experience for
each use case. When that is clear, research what capabilities are available in the market to help you build your
solution – you will find some third-party APIs that offer superb customer functionality.

Visa can be one of the partners offering API capabilities. Visa has developed more than 40 APIs and two of them
are mobile app APIs: Mobile Location Confirmation and Visa Transaction Controls.

Mobile Location Confirmation: Mobile Location Confirmation is a service that provides information about
whether or not an enrolled cardholder’s mobile phone is located near the merchant requesting authorization
for a purchase. Visa sends this information to you as part of the real-time authorization request. Enrollment is
done via your mobile app.

Visa Transaction Controls: VTC control-types let cardholders place their own rules on a payment card’s use
and when to be notified about different financial events. Additionally, at the touch of a button, cardholders can
disable or enable the use of their card.

These APIs use Visa capabilities, with Mobile Location Confirmation improving transaction processing and VTC
providing the customer with control over the Visa transactions they allow. By just including these APIs within
your app, your bank does not have to develop anything – let others who have the capabilities you need help
you do the work!

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Offering a “best in class” mobile banking app is core to
ensuring the future success of your bank
Mobile is increasingly the channel that customers want to use for their everyday banking needs and
you should acknowledge and respond to this customer demand. There are clear business benefits for
driving this channel, along with risks if you do not deliver the excellent experience the customer expects.

You need to ensure that the mobile banking app you offer is putting the customer needs regarding, What
they use, Where they use it, When they use it and Why they use it, at the center of its design. This is vital to
delivering successful customer adoption, and just as importantly, ongoing usage of your app.

Your aim has to be to continually develop the capability of your offer to ensure that you deliver an
amazing experience to your customers. Focus on the most important service features that will deliver a
better customer experience, higher usage and an improved brand perception, all through a much more
cost-effective channel.

And remember, the market leading banks in this space are unlikely to be achieving this on their own.
Instead, they will be using third-party capabilities, intelligence and experience to deliver the offer their
detailed analysis has shown their customer wants.

Our Visa 360 approach to mobile banking

Sitting behind our team of consultants is a wealth of knowledge, data and solutions that can be harnessed for
your benefit. Utilizing the following assets can complete a transformation of your mobile banking offer:

• Our Visa Consulting & Analytics Digital Service Line can support you to deliver implementable,
repeatable and trackable digital solutions. Our offerings also include wider business topics such as
developing the design of a digital bank covering the following:
• Strategy definition
• Customer value proposition development for the target segment
• Mobile banking features and functionalities identification
• App UI/UX design and prototyping
• Digital bank operational model and financial planning

12 Visa Consulting & Analytics

• With a team of data analytics professionals and nearly 100 billion annual VisaNet transactions, Visa’s
Analytical Insight capability provides intelligence that can provide you with a real competitive advantage.

• Our Innovation and Strategic Partnerships are enabling Visa’s ecosystem to support rapidly evolving
technology and partners. Visa has an extensive number of partnerships, and this capability can help you
connect with fintech and other startups.

• Our Visa Developer Platform provides access to a range of APIs that can be used for digital product
development, such as Mobile Location Confirmation that provides geolocation intelligence.

• With Visa’s Digital Solutions, you can create and manage your digital payments; through the Visa Digital
Enablement Program you can access the Visa Token Service and connect to current and future wallet providers.

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 Visa Consulting & Analytics

About Visa Consulting The combination of our deep

& Analytics payments consulting expertise,
We are a global team of hundreds of payments our economic intelligence and
consultants, data scientists and economists across
six continents. our breadth of data allows us to
• Our consultants are experts in strategy, product, identify actionable insights and
portfolio management, risk, digital and more with
decades of experience in the payments industry.
recommendations that drive better
• Our data scientists are experts in statistics, advanced business decisions.
analytics and machine learning with exclusive access
to insights from VisaNet, one of the largest payment
networks in the world.
• Our economists understand economic conditions
impacting consumer spending and provide unique
and timely insights into global spending trends.

For more information, please contact your Visa Account Executive or email Visa Consulting & Analytics at
[email protected]. You can visit us at Visa.com or on https://www.youtube.com/watch?v=t5NNnOY78Ls

Visa Consulting & Analytics is a global team of industry experts in strategy, marketing, operations, risk and economics consulting, with decades
of experience in the payments industry. Using analytics from the payment network with the most purchase transactions worldwide, our team of
subject matter experts can provide you with proven strategies and data-driven insights that support your business objectives.

The terms described in this material are provided for discussion purposes only and are non-binding on Visa. Terms and any proposed commitments or obligations are subject to and
contingent upon the parties’ negotiation and execution of a written and binding definitive agreement. Visa reserves the right to negotiate all provisions of any such definitive agreements,
including terms and conditions that may be ordinarily included in contracts. Case studies, comparisons, statistics, research and recommendations are provided “AS IS” and intended for
informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. neither makes any warranty or representation as to
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herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required. When implementing any new
strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances. The actual costs, savings and benefits of any
recommendations, programs or “best practices” may vary based upon your specific business needs and program requirements. By their nature, recommendations are not guarantees of future
performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. All brand names, logos and/or trademarks are the property of their
respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

© 2019 Visa. All Rights Reserved. Visa Public