Mobile Commerce: A Boon for Banks
The last time you checked your bank balance, where did you do it? If you’re like the average consumer, it was most likely on your mobile device. In fact, most people are logging into their bank’s mobile app 30 times per month on average to do any number of things including making a deposit, seeing if a charge went through, sending money to friends and family, paying a bill or transferring funds. This level of engagement is staggering, and a big shift from how consumers interacted with their bank accounts just a few years ago.
When it comes to shopping, consumers are turning to mobile, as well. This past holiday season, mobile shopping represented nearly 40% of all online traffic. Given that statistic, it’s counter-intuitive to learn that most mobile shoppers were primarily just browsing, but ultimately not completing their purchases on mobile devices. What can we learn from this? First, consumers aren’t used to a widespread mobile shopping experience – whether that’s due to registration issues, security concerns or the last step of the purchase process – the payment itself.
Second, trust is another hurdle that has to be overcome in the payment process. We know that consumers already have confidence in their banks to move their money and to keep it safe through mobile channels. The security and regulatory requirements for banks are some of the most stringent. For consumers, there is a familiarity, and even an expectation of banks, managing money through mobile banking.
[For More On Mobile: How MasterCard Is Pushing Mobile Payments Ahead]
On these pillars of engagement and trust, banks are changing the game of mobile commerce and payments at every stage of the mobile shopping experience:
Pre-Purchase
Give consumers what they want, from anywhere, whenever they want it. That’s the philosophy U.S. Bank has embraced in developing their mobile shopping experience. It reduces the friction that typically occurs between the product discovery and purchase steps. Their app makes it faster for consumers to purchase products they want from companies they love. By taking advantage of the human need for instant gratification, a mobile banking and commerce application can leverage traditional advertisements and relevant offers for products by linking them seamlessly into a mobile shopping experience. This effectively bridges the “pre-purchase to purchase gap,” and reduces the time it takes for consumers to find and consider products.
Purchase
Getting consumers to make the leap from product discovery to purchase through mobile isn’t easy. Reducing friction in the discovery process is just the first step. Most importantly, an app can improve product conversion rates by simplifying the purchase process for users. An advanced mobile banking and commerce app should leverage information about the consumer that the bank already knows, including their email, shipping address and payment information. That way, the consumer doesn’t have to enter this information every time they make a purchase and it makes the shopping experience simpler and more convenient.
A compelling in-market example of how shopping and payments have come together is with a banking, payments and shopping service in India called MOVIDA. The service allows consumers to pay bills, recharge prepaid phone cards and buy movie tickets anytime they want, with a few simple clicks within their mobile application. It works through a secure connection, linking the consumer’s debit or credit card with their bank-registered mobile phone number. Adding commerce services to their already high-engagement mobile banking applications enhances the customer experience and brings new revenue streams to the banks and card issuers.
Post-Purchase
Banks and financial institutions also have the ability to provide transactional and informational alerts that are delivered as text messages or push notifications. One reason that consumers trust their banks is because of the account monitoring and information services they provide. Card fraud is discovered faster and with less loss, thanks to mobile banking alerts. Because the bank has an account-wide view of the customer, and not just a single merchant view, they are uniquely positioned to offer post-purchase services. Offering consumers the ability to establish mobile purchase and fraud alerts, along with innovative tools like personal financial management and monitoring and transfer services, further engages the consumer into their mobile banking and commerce application—all while increasing their sense of safety and security.
Because of these existing high-engagement mobile banking services, and the underlying trust consumers have in them, banks are capitalizing on the mobile commerce opportunity. In the process, they can generate new sources of revenue and serve their customers with an offering that provides value in new ways.
Lisa Stanton is the president of Americas for Monitise.
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