Banks and legacy financial institutions (FIs) might be wise to study what disruptive technologies recently did to the print publishing industry, taxi cabs, network TV, and a host of other businesses that were disintermediated with little to no warning in recent years.
Does any doubt remain that banks and legacy FIs are next on the Silicon Valley hit list?
In the February 2020 Building A Better App: Banks And The Innovation Imperative Report, a PYMNTS and Ondot collaboration, we learn that very nearly half of smartphone owners are considering dropping their dependable (if dull) legacy FI for a shiny new FinTech or challenger bank offering instant money, spend controls and a mobile CX that makes money feel better.
As the report states, “We … find that a significant share of consumers are willing to bank with the institutions — financial or otherwise — that offer them the best spending and money management tools.”
Mobile Cards: Make or Break?
While banks continue to enjoy a high level of trust among consumers, that group of mobile banking users mentioned earlier are prime targets for Amazon, Apple, Facebook and Google, all of which are hawking digital banking and/or cryptocurrency solutions as each tries to convert casual social media platform users into banking customers in proprietary ecosystems.
One way that banks or ambitious social media platforms will win this combat for customers is through the use of mobile credit and debit cards, with a highly configurable nature and full range of card and spend management controls to please the most vacillating of customers.
For the purposes of the February 2020 Building A Better App report, PYMNTS asked survey respondents to build the perfect card — spend controls, instant credit, a multiplicity of card controls — just name it. Admiring their work, 44 percent said they’d download the mobile card they had just created, presumably trading in their limited and fee-laden legacy bank cards. The highest interest is among “bridge millennials” whose card spend averages $40,000 annually.
They are the world’s most sought-after banking customers, aside from the wealthy of course. And in surveys at least, they don’t exhibit much loyalty to FIs. A lot of banking customers are going to switch brands this year, and services like mobile cards will be decisive for them.
Follow the Smart(phone) Crowd
We’ve all gotten used to the smartphone remarkably quickly. It’s become like an appendage in many ways, giving us special powers, and that’s not going away any time soon. What is changing are the card habits of demographic groups. The latest Building A Better App report finds that two-thirds of smartphone owners have downloaded mobile cards onto their phone already, and the younger we look the higher that adoption figure climbs.
Mobile cards and their convenience will turn heads and make up minds in the battle for bank account market share that’s now shaping up.