Time to rethink mobile banking for the millennial market

By Misha Rogalskiy, co-founder, Monobank

Millennials are transforming the way most traditional services are provided and banking is no exception. Even the most traditional banks now offer at least some form of mobile banking app. Yet creating an app which meets the digital-first demands of millennials is also a significant challenge. For example, a study by Scratch found that 71% of millennials would rather visit the dentist than listen to their banks, while 68% believe that the way they access their money in five years’ time will be totally different.

The problem for most banks is that much of their existing legacy technology was created long before the existence of smartphones. This makes it hard, if not impossible, for many to switch to a ‘mobile first’ or ‘mobile only’ strategy. Many of their customers will already rely on the existing web application and the banks will still have significantly more web users than they will be likely to have mobile users.

But for new entrants, adopting a mobile only strategy offers a lot of advantages. This allows them to focus on developing only the services and functionality which matter to the user. Millennials also increasingly use mobiles as their only screen and are highly sophisticated users, which allows developers to be quite innovative in their approach. Security checks are a good example of this.

In Ukraine, you need to verify all Visa and MasterCard transactions online. This is achieved by sending an SMS to your phone with a security code, which must be entered online to complete the transaction. The wait for this code can be around 15 to 30 seconds long. For today’s users, this seems like an eternity. This delay quickly creates doubt in your mind and may cause you to abandon the transaction in case something has gone wrong. Millennial customers are also the group most likely to abandon online transactions, with more than four in five saying they have done so in the past, according to a study of consumer habits by Visa.

When we developed Ukraine’s first mobile-only banking app, Monobank, we were able to offer a different approach to making these payments. Mobile technology is able to gather far more information about you than a web application can. We are then able to use this date to automatically check it is you making the transaction. Your ability to communicate with clients through a web application is also very limited. Even if there is suspicious activity on their account, it can be difficult to reach them in a timely way to check they are making the transaction. Yet mobile banking allows you to message your client directly, helping prevent fraud at a much earlier stage.

In Ukraine and other markets, problems arise when the bank or other large organisation decide to go mobile but then outsource the app’s development to a third party. When it is a big part of your business, or even your main business, you really shouldn’t be outsourcing this to outside parties. The development of a mobile banking app can only be done properly in-house, otherwise it is really hard to do without making mistakes. To make sure our app was tailor-made to the needs of our customers, we also took a different approach to how we developed and tested the app. We used social media to generate interest in our project and asked a group of 10,000 customers who had signed up for our card in beta mode to test and provide feedback on the user experience. They were able to do this informally on Facebook, which made direct communication possible and helped the customers feel connected to us and the rest of the team. This was a tremendous support for us in helping test and launch any new improvements. Our customers have also become our strongest advocates, with 80% of our new business resulting from word-of-mouth alone.

We are very proud of this unique engagement, particularly with the millennial market. In turn, this has helped Monobank to become profitable just seven months from launch. Today we have over half a million users and have an exceptionally high user rating for our app, which has an average rating of 4.9 out of 5 on the Apple Store. The success of this model also shows how the future of mobile banking should take shape and tailor services to a technology savvy market.

Millennials will increasingly expect their mobile banking apps to do all the processes in the background, with minimal effort needed on their part. This new sector does not care about banking in itself, but they do care about their payments being made quickly and securely. This can already be seen in the meteoric success of aps such as Uber, which allow the client to just order their car with the payment process taking place in the background. This will apply to a wider range of different  transactions, with even processes like securing loans and credit becoming much more user friendly, even through your mobile.

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