Mobile: Why Smartphone Banking Usage Rates Have Stalled

By Jim Bruene on March 30, 2015 8:35 PM | Comments

The Fed's latest mobile banking/payments usage numbers (full text) were bouncing around the fintech blogosphere last week. Most observers noted the 6 percentage-point rise in mobile banking across all devices (from 33% to 39%, includes respondents with any mobile phone & bank account) and the 5-point increase in mobile payments (from 17% to 22%). (Note: The online survey was fielded in December of each year. It counts as a user anyone who used a particular channel during the 12 months prior.)

Those trends were all upbeat. The only sour note was the flatline of mobile banking usage among smartphone owners. There has been virtually no change in the usage percentage over the past 24 months (52% in 2014, 51% in 2013, and 50% in 2012). Granted, the base of smartphone users has grown substantially during that time (71% of all mobile phone users in 2014, 61% in 2013, 52% in 2012), so the total NUMBER of users is growing at a nice clip.

Why has smartphone mobile banking stalled? Partly, it's just a normal plateau. Every new banking technology of the past 40 years (including ATMs) have struggled to get more than 50% adoption. That's not easy to solve. Education helps. But many users just need time to get on the bandwagon.

But I'm convinced that part of the problem is a flawed mobile banking UI/UX. In my case, despite being a smartphone addict, I use mobile banking sparingly, 2 or 3 times per year for most accounts. And often it's just to see what's new with the app. If I wasn't in the business, I'm not sure I'd be an active mobile banking user at all. And that points to a problem for issuers, who increasingly must satisfy mobile users.

What is holding me back? It's not security, the #1 reason given by non-users, because I believe mobile banking is significantly more secure.  And it's not because I forget about mobile banking or don't want to be bothered. I've been a huge mobile app user/believer since the the iPhone app store appeared on the scene almost 7 years ago. I have used 8 to 10 apps every day and in the last week have opened at least 25 (see note 1).

The problem is poor design relative to other non-banking mobile services, specifically these four issues:

1. Mobile login is tedious: It usually it takes 5 or 10 seconds longer to login via mobile. While that's a small amount of friction, it's just enough to send me to my laptop. And banking is the only app I use that requires constant logging in.

Help is on the way: TouchID and other biometric login methods will solve login stress. With TouchID, it's actually easier to login on mobile than laptop. Alternatively, no-login quick view of balance and recent transactions is even better.


2. Clunky mobile UI: It's tough to prove that a UI is flawed without having usage data. One person will fly through a task, while another gets mired on the same screen. But every so often, I come across a pretty obvious design failure. One I noticed this week (and the inspiration for this post), is the lack of a "go" button on Bank of America's mobile login screen (see inset). 

Previous users opening the app see just their remembered username. So far so good. But then, there are no visual cues on what to do next. All the choices seemingly relate to problems (lost password, lost ID, etc.) 

I stared at the screen for 30 seconds thinking I was either an idiot or the screen hadn't fully downloaded. But it's an app, so of course, the screen was all there. It turns out that the company that has boasted the most online banking users in America for going on 20 years neglected to create an intuitive start page for mobile banking. (Users are expected to know to touch their tiny username near the top of the screen to move to the password page).

3. Missing data: I did a project for a huge issuer three years ago. Even then, I was shocked that its mobile app only displayed the last 20 credit card transactions. For a power user, that's not even a full month. (It has since expanded transaction history substantially). But even that paltry 20 absolutely blows away my Bank of America Alaska Airlines card which still has NO mobile transaction history. It only shows current balance. Granted, I'm locked into this card due to the rewards, so I'm hardly going to leave due to circa 2007 mobile features. But the bank could even make mobile a profit center. I'm sure the bank could increase fee income by selling me a package of mobile features that raised my annual fee $15 to $20.

4. Lack of search: It struck me the other day as I was looking for an errant transaction that it was absolutely ludicrous that I was downloading old PDF statements and looking through them to find a single transaction. Didn't Google make this particular manual task obsolete more than a decade ago? Not only should you not have to look at transaction history statement by statement, you should be able to type the first 3 letters into a search box and have it autofill with your likely answer. This is one area where Mint and other PFMs blow most financial institutions away.


The future: I am firmly in the mobile camp. Eventually, mobile usage completely subsumes the desktop. Traditional online banking can't compete with a TouchID-enabled mobile experience, combined with integrated image capture, location awareness, better security and more. The only question is how long it takes to get there.


1. In the past week I've the following mobile apps: Feedly, Flipboard, NYT Now, Alaska Airlines, Expedia, Starbucks, Evernote, IMDB, Yahoo Sports, Google, Redfin, app store, notes, calendar, camera, mail, WeatherBug, Dark Sky, Kindle, Amazon, JamBase, Kayak, Craigslist, Fitbit, and BofA...see above.


A Big Bank Should Buy Robinhood Now

By Jim Bruene on March 16, 2015 3:00 PM | Comments
robin hood app.jpgFree stock-trading startup Robinhood has been getting a lot of press lately, and it appears to be well deserved. Founded in 2013, the company has raised $16 million and is likely looking for more. Although many fintech startups have attracted 9-figure investments, none has as many celebrity investors. Rappers Snoop Dog and Nas are on board, as is Academy Award winner Jared Leto. The company also boasts several tech celebs: Aaron Levie of Box, Dave Morin of Path and Howard Lindzon, a Finovate/FinDEVr alum. 

But back to the premise. Look at the reported metrics (source: Institutional Investor, 13 Mar 2015, and VentureBeat, 12 Mar 2015):

  • 800,000 user waitlist (the platform just opened to the public 12 March) 
  • average age of 26.5
  • 90% are under 40 
  • 25% of users are first-time investors
  • 500,000 trades conducted
  • no minimum deposit, but company says smallest trading account is $400
  • website traffic: 970,000 in last 30 days (source:, 13 Mar 2015)
  • ranked #6 in U.S. Apple app store free finance section (source: Apple, 13 Mar 2015)
While that is impressive traction, the lack of revenue can't go on forever (they currently earn a few thousand dollars per month for order flow). The company says it will monitize with margin lending, premium services, and, surprisingly, given its traction with youth, institutional investor services. 

Given their anti-establishment positioning, the Robinhood team may not like this idea, but I think the company would make an excellent retail bank acquisition (if the price was no more than 10x the money raised, or $160 million). This assumes, perhaps naively, that said acquirer would leave the Robinhood brand alone. And if Robinhood is too pricey, then banks could emulate its strategy with other partners. Why get involved in free stock trading?

  • Millennial customer acquisition: I can't imagine a bank ever getting close to 1 million on its wait list. There just isn't a compelling reason. But free stock trading apparently has high perceived value. 
  • Checking tie-in: It won't be easy to cross-sell banking services. But by allowing free, real-time and super simple transfers from linked checking, you have a chance (especially if you charge a nominal fee for other bank transfers).
  • Little cannibalization: Since most banks don't generally have a large stock-trading business, free trading won't devastate an existing business like it would at Schwab or E*Trade. While dollars invested into stocks are dollars not sitting in a checking account, if the majority of trading customers are new, that's not a factor. 
  • An ironic brand: I'm pretty sure no major bank board is going to sign off, but I love the idea of a bank using the Robinhood brand to gain traction with young adults. The irony is perfect.
Partnering: Even if you can't buy the company, you may be able to partner with them. When signing up for an account, Robinhood already preloads online banking login details for eight major financial institutions (in the order shown below). There is also an option to link any checking account by inputing your account and routing numbers. 
  • Bank of America (see screenshots below)
  • Wells Fargo
  • Chase
  • Citibank
  • US Bank
  • USAA
  • Fidelity
  • Charles Schwab
A partner might be able to get their logo displayed exclusively (or at least first). 

Screenshots from Robinhood app (18 March 2015)
Login screens to link a Bank of America checking account to your RobinHood app



Don't Miss Out on the FinovateSpring Very Early-Bird Ticket Discount!

By Eric Mattson on March 4, 2015 7:19 PM | Comments

btn3_ov.pngHot on the heels on our largest FinovateEurope to date, we've begun to focus on our FinovateSpring event scheduled for May 12 & 13 in Silicon Valley.

Our team is hard at work sorting through the huge stack of applications from innovative fintech companies looking to showcase their latest and greatest in front of more than 1,300 attendees. Based on the initial analysis, it seems safe to say that this event is going to be one of our best! 

The audience is also shaping up to be one of our best ever and includes executives from leading organizations like the following:

  • American Express
  • BancVue
  • Bank of the West
  • Barclays PLC
  • BBVA Compass
  • Brown Brothers Harriman
  • C1 Bank
  • Capital One
  • Celent
  • Charles Schwab
  • Chase Paymentech
  • City National Bank
  • D.E. Shaw
  • Deluxe
  • Diebold
  • Experian
  • Federal Reserve System
  • Fidelity Institutional
  • First Republic Bank
  • FIS
  • Fiserv
  • FNB
  • Forbes
  • H&R Block
  • Harland Clarke
  • Intellectual Ventures
  • Intuit
  • Jack Henry
  • Javelin Strategy
  • JP Morgan
  • Justice FCU
  • Lending Club
  • LendingTree
  • Mastercard
  • Maybank
  • MACU
  • Nasdaq
  • New York Life
  • Pando Daily
  • PNC Bank
  • Primerica
  • PSCU
  • Quicken Loans
  • Route 66 Ventures
  • S&P Capital IQ
  • Silvergate Bank
  • Stanford FCU
  • State Farm
  • TCV
  • TD Ameritrade
  • TSYS
  • Umpqua Bank
  • USAA
  • UW Credit Union
  • Visa
  • Wells Fargo
  • WePay
  • Western Union
  • Yodlee
  • And many more!

So, while it will be a few more days until we announce the presenter lineup, NOW is the time to lock in the affordable Very Early-Bird Ticket price. Buy your ticket before this Friday, March 6, 2015, and you'll save $200 on your chance to watch the future of fintech unfold live on stage!

We'll see you in Silicon Valley in May (or New York this fall)!

FinovateSpring 2015 is sponsored by: The Bancorp, CapitalSource, Envestnet, Financial Technology Partners, Hudson Cook LLP, Kyriba and Life.SREDA.

FinovateSpring 2015 is partners with: Aite, Bank Innovators Council, BankersHub, BayPay, Bobsguide, BreakingBanks, California Bankers Association, Canada, Celent, eBankingNews,, Filene Research Institute, Hotwire PR, Javelin Strategy, Mercator Advisory GroupWestern Independent Bankers and SME Finance Forum


Transaction Alerts Need to Get Smarter

By Jim Bruene on February 18, 2015 4:52 PM | Comments
fraud word cloud.jpgMy inbox is far from normal. With 25 active financial accounts, all set to maximum notifications, I am drowning in email alerts, push notifications and other helpful communications. But who isn't overloaded with missives from social media, news feeds, spambots and whatever else is competing for your attention.

Banks need to help users cut down on the noise, by offering smart alerts that don't bog you down in trivial details. Not to pick on anyone in particular, because all my providers do pretty much the same thing (with the notable exception of BillGuard), but this alert from Bank of America today (see below) is a good example of info overload. 

Yes, I'm sure I asked the bank to notify me of any card-not-present transactions. Given the amount of times my card number has been breached in the past five years, it's a good early warning. But really, do you think it's necessary to tell me for the 89th consecutive month that you paid my $8.75 Netflix monthly fee? Really, I just want to be informed if it suddenly increased or showed up twice in the same month. 

BofA would probably want my permission to stop sending me this monthly alert. So how about a little button that says, "Don't tell me about this charge if it's the same next month," or something along those lines. And this should also be an option in the bank's alert dashboard (e.g., "Don't alert me to repetitive monthly fees, unless they change"). 

Thanks for listening. 


Bank of America email alert (18 Feb 2015)



Source: Fraud artwork above from NCUA's MyCreditUnion 


Tuesday Tactics: Creating a Winning Confirmation Page

By Jim Bruene on February 17, 2015 11:12 AM | Comments
pelican_laptop.jpgOver the years, I've rarely been impressed with the confirmation pages displayed after a user takes an action, especially completing an online loan or product application. Today, I came across a good example of a post-sale confirmation screen from RedBubble (see screenshot below), an online purveyor of smartphone cases, laptop skins, and so on (see inset). 

Notice the things they do right:

1. Thank you for the order 
2. Mockup of the receipt with a big "PAID" stamped across it
3. Specific details on what happens next
4. Social sharing tool (may not be applicable to financial institutions, use at your own risk)
5. Links to key help areas (changing the order, determining shipping date)
6. Email address for Help (with order number clearly visible)

Other items a bank should consider:

1. Toll-free contact number
2. More personalization; for example, "Thanks, Pat" 
3. Detailed information on expected turnaround time for the application to be processed
4. Have a real person say "Thank You"
5. Navigation option back to an appropriate area on your website
6. Upsell messages
7. Security assurances
8. Privacy policies



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