Borrower demands drive bank app evolution

A global industry report outlining emerging digital features that “customers crave from banks” revealed borrowers still seek human interaction, Mobiquity’s latest Digital Banking Features Radar revealed.

Even in the increasingly used online banking app environment, when it comes to digital mortgages and 're-mortgages', an opportunity for customers to “…schedule online meetings with advisors” still holds favour — even if virtually.

“Meetings with advisors are still craved for [by] clients, after all people trust people most,” a spokesperson for Mobiquity told Mortgage Business.

“Clients are just seeking new, convenient means of connecting and virtual meetings allow them to do so.”

The Digital Banking Features Radar — an industry pulse check — also confirmed demand for improved credit scores by taking out and successfully paying off “mini loans” to aid in attaining larger loans and lines of credit.

“Credit building services have been created [in app] to help increase the client’s credit score, which in turn helps provide supporting evidence required to secure a loan,” Mobiquity explained.

“It often involves a loan for mundane expenses that do not exceed the amount in the customer’s deposit.

“The deposit provides a guarantee that the credit will be paid back.

“The customer uses and returns the credit, creating a history of successful credit repayment.”

The radar ultimately revealed that “the bar is lifting for banks”, with 80 per cent of digital features now forming the basics of customer expectations.

“This leaves banks with only 20 per cent to differentiate their features and engage customers to secure loyalty,” Mobiquity highlighted.

Mobiquity in Asia Pacific general manager Gustavo Quiroga confirmed that the narrowing margin for differentiation in digital banking services calls for more creative thinking with a customer-first mindset.

“Our Digital Banking Features Radar is a resource for Chief Data Officers and Banking Product Managers to take an aspirational view of what "great" user experience looks like; challenging their organisations to accelerate innovation and deliver new experiences."

"Many of last year's "delighter" add-on features have become this years' "must have" minimum expectations, so the pressure is on for banks to differentiate and elevate their customer experience in an engaging way,” said Mr Quiroga. 

“To orchestrate unique experiences, brands must enlist modular tech stacks that can be customised to suit customer needs — simply going to market with an "out-of-the-box" product offerings from platform vendors is not good enough.

"This will also allow banks to set themselves up for continuous product innovation that services utility and delivers the “differentiators” that align to customer values, lifestyle and financial health needs," he stated.

What borrowers want and how apps provide it

The report broke down the latest data into what kind of banking services and facilities various apps around the world have, based on what customers wanted and or desired.

These categories highlighted how app evolution has progressed, and what is needed to placate users of preferred online app technologies.

The ‘Musts’ were features observed in the majority of banks, while the ‘Delighters’ and ‘Differentiators’ were what customers expected – and not having these in an app may lead to losing clients to competition, Mobiquity explained.

In terms of ‘Loan Money’-related features under the Delighters category, borrowers used bank apps for the following:

- Digital mortgage or ‘re-mortgage’ - In addition to financing immediate needs and purchases, financial service providers also work on offering digital mortgages, transferring this multi-step process to online. Functionalities that often include opportunity to browse through different options/brokers, calculators, online document submission, and an opportunity to schedule online meetings with advisors.

- Jeonse loans – Interestingly, this product is available in South Korea; it’s a special agreement between tenant and landlord. The tenant provides a certain share of the property’s market price (usually 50-80 per cent), from which the landlord can invest over the course of the renting agreement. The tenant can use the property rent-free, and in the end the landlord returns the money while retaining all profits from investments. In this case the bank provides a loan for the tenant to cover its costs.

- Credit score analysis - provides a summary of the customer credit report, insights into what influences the score and tips on improving it. Some solutions also allow users to model how certain financial decisions are going to influence the credit score.

- Credit building services - to improve user’s credit score, often it involves a loan for mundane expenses that do not exceed the amount in the customer’s deposit. The deposit provides a guarantee that the credit will be paid back. The customer uses and returns the credit, creating a history of successful credit repayment, increasing the client’s credit score [for loans].

[Related: Banks becoming more sustainable at board level]