Banking has come a long way from what it used to be, in recent years, digital banking apps have completely transformed the way people manage their money, giving them a better understanding of where their money is going.
As the world is recovering from the pandemic, industries across the board are forced to adapt and evolve to keep up with the new reality and remain relevant. The digital banking sector is no exception - it is undergoing significant changes that will meet both businesses' and consumers' needs by 2023. In this article, we'll explore five key trends that will dominate the mobile banking space over the next couple of years.
Although Open banking is currently in its early days, it’s expected to revolutionize the traditional banking system.
Open banking basically allows third-party apps to access consumers' financial information, enabling greater financial control and enhanced user experiences.
For instance, consider a scenario where you're able to manage all of your bank accounts and credit cards in one app, while also using personal financial management tools to keep track of your spending and savings. This is exactly what open banking offers, and it's no surprise that it's gaining popularity.
The key to success in personalizing banking experiences lies in how well financial institutions can understand their customers. This is where analytics comes in, playing an increasingly crucial role in customer acquisition, market segmentation, and cross-selling efforts.
For instance, banks can now use spending data to offer customers personalized money management tips and product recommendations through their mobile banking app. If a customer frequently spends money on dining out and entertainment, the bank may suggest a credit card with cashback rewards for those categories. Alternatively, if a customer has a lot of subscriptions and recurring expenses, then with the help of analytics, you may offer them a budgeting tool to help manage their expenses more effectively.
With advancements in NFC technology and QR code scanning, customers can now interact with banking ATMs with more ease. Instead of using multiple physical cards, individuals can now access their funds and make cash withdrawals by scanning their smartphone screens on ATM machines. This not only provides an improved user experience but also helps to reduce cloned card fraud. By eliminating the need for physical cards, cardless ATM withdrawal offers a more secure way to withdraw money from ATMs.
A real-life example of cardless ATM withdrawal is Mashreq Bank’s cardless cash withdrawals for corporate customers. Their customers can use the app to generate a one-time access code to be used at any of their ATMs instead of using their physical debit card. The code is valid for 30 minutes and allows the customer to withdraw cash or make deposits without needing their physical card.
Money management tools offer a range of features to help users control their budgets, such as the ability to set custom budgets by categories like utilities or groceries.
These apps also allow users to see how money is coming in and out of their accounts and visualize their spending through simplified charts and graphs. Additionally, mobile banking apps offer visual forecasts of a user's finances over time and send automatic notifications when they are close to exceeding their monthly/annual budget.
A recent study conducted in the MENA region found that most people do not have financial literacy. 32% of respondents had a formal financial plan, while 68% did not. Of those without a plan, 38% had no intention of creating one. This shows the need for financial education and planning services in the MENA region to help people better manage their finances and achieve their financial goals.
To help their customers improve their financial well-being, many fintech companies and banks are creating content that can be accessed on mobile apps and websites.
At Lune, we are committed to providing our clients with the latest digital banking experiences to improve their customer's financial well-being. If you're interested in learning more about our digital banking services and how to provide a unique banking experience, please don't hesitate to reach out to us today.