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Beyond the bank app

17 July, 2015George Browne

Research published by the BBA confirmed that banking by smartphone and tablet has overtaken branches and the internet as the most popular way to bank.

With fewer and fewer customers visiting branches banks are starting to think creatively about how they can continue selling products and services to their customers. Banks have realised that they have access to an incredible amount of data about our spending habits. They know where we shop, our interests and what stage we are in our lives at. Are we married? Do we have children?

compressed app bankingUsing apps to sell financial products

The most obvious channel is via mobile applications. For example your bank could provide an app to help you manage your finances and give better insights on your spending habits. Recently Natwest beta-tested three ‘living’ apps at two of its branches in East London. One app called Spendorama was based around spending habits and challenged users to rate their purchases. While the other two helped to prepare customers for major events such as buying a house or having children. Ultimately the data collected from apps like this could enable a bank to have ‘better conversations’ with their customers when the time comes to buy these products and suggest the ones that would suit their budget.

Get better deals on household bills

However, the next generation of banking apps has the potential to go beyond the simple ‘gamification’ of managing your monthly budget. Data could be used to notify customers about the best deals on household bills if it compared your spending against other customers near you for example.

The interrogation of your data in this way poses a couple of questions. Can the banks be trusted to do this properly? Their IT systems are not exactly known for their reliability, over the past twelve months there have been numerous failures with these systems. Customers might also be concerned that their data won’t be secure if exposed to other parts of the bank or external agencies.

Building and maintaining relationships with customers

This all comes at a time when the banks need to build and maintain relationships of trust with their customers. And this is inherently difficult when there is less and less face-to-face interaction with their customers. If the banks do go down this route they will need to ensure that they have the IT infrastructure in place and that they are clear from the very beginning about what data they are using and how they are using it so as not to totally mislead their customers.