3 reasons why banks can't afford to ignore mobile wallet
Although currently 40% of users are using the apps more to place orders and compare prices rather than make actual payments - you don't need a crystal ball to see a future where mobile payments replace credit and debit cards completely. Here are three reasons why banks can't afford to ignore Mobile Wallet any longer:
1. Customers will come to expect instant payments and engaging service
Customers' lives are increasingly centred around their smartphone. Phones have already replaced many of the items we used to carry around such as cameras, train tickets and newspapers. How long before customers expect to be able to manage all their personal finances from their phone, tablet or smartwatch?
These Mobile Wallets are the future of how your customers will handle their money. Banks who embrace open banking principles have the opportunity to create more sophisticated and useful services than the fragmented and limited offers from challengers such as Apple, Amazon or single store apps. A bank can leverage their expertise to offer extensive features and integrate with third-party providers (TPPs) to eliminate the need for multiple apps. Mobile payments will be an essential part of the financial eco-system. And, banks are the natural owners of this space. But to win the game they need to match agile and lean competitors.
2. You can't prise a Millennial away from their phone
For your younger customers the Mobile Wallet future has already arrived. This generation is not attached to bank branches; they're attached to their phone. Even internet banking is seen as an anachronism. As they accumulate more wealth and seek a wider range of financial services, this generation will become a more profitable customer sector. They are already using our Personal Finance Management (PFM) functionality to monitor and plan their spending and budget for holidays and bigger purchases. Later, they will need help at various life stages. For example, banks can use Mobile Wallet to send instant pre-approved loans with competitive rates and easy repayment options to convert any spending to microloans.
In the meantime, Mobile Wallet significantly reduces the cost of on-boarding these new customers. Adding convenient services, such as P2P payments, and innovations, such as integrating Mobile Wallet with chatbots, can also help ensure their long-term loyalty.
Mobile Wallet can also help target other previously difficult to reach (or cost-effectively service) markets. These include supporting customers on low incomes with limited access to banking and financial services and offering easy instalment repayment options for micro-loans. Mobile Wallet is a perfect example of how technology can boost financial inclusion amongst these previously neglected groups.
3. You need to know your customers, as well as Amazon and Google, know theirs
There are huge opportunities to use instant campaign feedback and customer data to gain insights into their future behaviour and improve customer service, experience and loyalty. For example, banks can work in partnership with retailers or restaurant chains to create personalised loyalty systems. With VeriPark's machine learning capability, we can analyse shopping data and issue hyper personalised, location-based push notifications to enhance offers.
Most Mobile Wallet users are currently in the millennial age group. But they are influencing older generations. Providing a compelling Mobile Wallet offering is a priority for banks who want to stay ahead of the competition. Our figures show how Mobile Wallet makes this possible. When we worked with Turkey's largest bank to develop their Mobile Wallet system, they attracted 50,000 new customers in just three months.