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.