7 Mobile Banking Trends That Will Be Huge in the Next 3 Years

Digital transformation does not happen overnight. It is a complex and time-consuming process that fundamentally impacts all aspects of an organization. Therefore, many banks are currently going for enterprise mobile application development to start realizing the value of their digital investments shortly. According to Deloitte’s 2019 Banking and Capital Market Outlook report, over one-third of all banking institutions have already invested in technologies such as open APIs, big data engines, or chatbots, to accelerate digital adoption and modernize their offering.

Mobile wallets, on-demand banking apps, and the new trend of digital assistants like Siri and Alexa are at the forefront of the mobile banking wave. And it’s the consumers who often act as the prime movers of innovation. They’re increasingly demanding and want self-service, personalization, and immediate assistance. To keep up with these evolving customer preferences and stay competitive, banks and financial institutions have no other option but to tap into the latest mobile banking trends. But what are they?

Let’s find out what the current trends in mobile banking are and what will be coming and growing for us in the digital banking realm in the next few years.

As banks and financial institutions grow their revenue and expand services, they run into a heightened security risk. The problem is severe, as by 2020, the expected fraud losses incurred on credit, debit, and pre-paid cards could surpass $12 billion (Forbes). When we consider the additional cost of other mobile banking fraud types, such as phishing, account takeover, or identity theft, it’s hardly surprising that fraud detection makes one of the top priorities in mobile banking.

Fortunately, another significant trend in mobile banking can help fintech businesses safeguard their resources and protect their customers’ identity. The use of big data engines enables banks and financial institutions to improve risk assessment processes and jump ahead of the competition by providing streamlined customer experience while reducing the impact of fraud.

Thanks to big data, banks and financial institutions can extract and aggregate vast pools of customer data from a variety of sources, such as financial statements, mobile banking history, or even social media. This capability makes it possible for them to investigate every customer’s historical behavior, identify common patterns, and develop a holistic view of each account. Based on that analysis, predictive models of fraud detection can be developed, which will raise the red flag whenever some irregularities are detected.

While opinions vary on whether or not our attention span is shrinking, consumer patience is definitely narrowing. Who likes queuing at an ATM? To deal with our collective restlessness, banks have introduced another innovation, namely cardless ATM withdrawals.

While this mobile banking trend is not entirely new, the increasing adoption of this solution by banks attests to its swelling popularity. First, credit and debit cards were pushed out by mobile wallets for online and in-store purchases; now, it’s their turn to step down at ATMs.

Depending on a bank or financial provider (you may use Google Pay or Apple Pay, for example), two ways are available to withdraw money: via an app-generated code or near-field communication (NFC). The first method involves validating transactions with a QR code displayed in your banking app. The use of NFC resembles contactless ‘Tap and PIN’ card transactions; however, this time, you tap the ATM sensor with your phone to take out money, with no card required.

This mobile banking technology appeals to consumers with its speed and convenience. However, those two advantages aside, cardless withdrawals can also help reduce cloned cards fraud, as even if an ATM has been tampered with, all your assets are safe with encrypted transactions.

Open banking is a new standard for financial institutions that enables banks to share user data with third-party providers through the use of open application programming interfaces (APIs). The standard aims to create a complete personalized customer experience with a proliferation of new products and services.

By leveraging this concept, banks and financial institutions can build a network of financial services accessible from a single integrated point of control chosen by the consumer. Benefits include a more transparent view of one’s finances, quick and direct payments, faster and more convenient credit reporting, and enhanced user experience.

How does this work in real life? Here’s an example. Most of us have several bank accounts. One bank offers an attractive saving scheme, another has low interest rates on personal loans, and yet another provides debit cards at no fees. Open banking makes it possible to choose a provider that will act as a centralized hub for all these accounts and services, so that you no longer have to log in to each service individually but get a single, comprehensive dashboard to manage all of them.

Regions such as the UK, Hong Kong, Singapore, Sweden, and the Netherlands lead the way in open banking, while others follow. The standard offers numerous advantages, but it’s still an emerging trend that will need a few years to catch on, also for regulatory reasons.

The banking industry is notorious for its resistance to change. The current-day banking systems are heavily reliant on manual processes and lengthy procedures, and traditional financial institutions are behind the curve in developing considerable resources needed to offer digital solutions to consumers. However, as the above mobile banking trends demonstrate, innovations are constantly unfolding. Technology is moving at lightspeed, and it presents a wave of opportunities for financial institutions willing to adapt. To remain successful, modern banks must strike a balance between their brick-and-mortar branches and their mobile banking offerings.

As consumers spend over 5 hours a day on smartphones, and the number of mobile devices is anticipated to reach 16.8 billion by 2023 (Statista), banks that will be the first to leverage the emerging mobile banking technology trends are bound to gain a competitive edge. SMS banking and a basic mobile banking app are not enough. Consumers seek a comprehensive, positive, end-to-end banking experience that is personalized and effortless. They won’t stay loyal if a bank doesn’t live up to their expectations and will vote with their thumbs tapping on smartphone screens.