There’s an old saying that says “There are lies, damn lies and statistics.” I thought of this quote when I read a recent J.D. Power report that shared statistics and conclusions regarding customer satisfaction with banking and credit card providers’ digital offerings.
Among the most noteworthy conclusions of this report was this one: “Bank mobile app satisfaction declines as complex features stump consumers.” The report suggested that customers were challenged in completely understanding all mobile banking features but that when they understand them, they are more satisfied.
That seems logical.
But of course, it would be a big mistake for credit unions to conclude from this report that limiting features to account balances, transfers, bill pay and deposit capture is the proper course for digital services. The real lesson from this report is that new features should be added judiciously and with simplicity and great user interface features, along with some good promotional and educational content for helping to understand the value of the new features.
CU Solutions Group and its subsidiary LifeStep Solutions, LLC have been on a groundbreaking path to create a suite of mobile banking features through the mobile banking plus platform called LifeSteps Wallet. In this feature suite, credit unions’ members can have access to more than just the traditional features delivered through a third-party native mobile app. Members can access the credit union’s auto buying and home buying resources and other financial wellness features including financial education content.
When CUSG first launched this product with the first five or six clients, we learned a lot. And our learnings correlate with the J.D. Power article. For instance, we learned that members are not wowed by a bunch of new features if they don’t understand their value. We also learned that the new mobile banking features won’t be used by members unless they are simple and easy to find and use and unless they are properly marketed.
CUSG’s next iteration of LifeSteps Wallet will focus more on enabling the most essential mobile banking feature add-ons, and we will enable credit unions to launch them in one of two ways, either through the mobile banking plus secondary app or by including a bundle of features within the native app in conjunction with the mobile banking provider. Each of the features can also be used a la carte as add-ons vs. a complete pre-packaged bundle. So, if a credit union wants to add a P2P solution, fractional share investing or financial education content, we will enable that in a cost-effective way for all credit unions. But if a complete bundle of features is preferred, the LSW product can accomplish that as well.
But getting back to the “why” for a moment…
Consider that many of the highest rated bank apps by J.D. Power, like Chase Mobile, have features that most credit unions don’t yet have. And yes, they are simple and easy to use and well marketed.
To illustrate this, go to the app store and search or download Chase mobile. Click on the description of the app. Chase Mobile promises to help “manage your accounts, pay bills, pay people, deposit checks, even transfer money safely and securely.” The features also allow for monitoring of credit card activities and the set up of travel notifications for debit and credit cards. Customers can set up account alerts and adjust preferences. They can get updates on credit scores and access the Chase home lending dashboard. Chase customers can send and receive money using Zelle P2P. They can access a reloadable prepaid debit card and send wire transfers.
Chase customers also have access to card reward programs, and they can send friends and family a digital gift card and earn statement credits by using Chase offers. There is a savings tool with Chase Autosave. And customers can do stock, bond, mutual fund and ETF trades with the Chase You Invest feature, a fractional share small-dollar investing tool.
And of course, the mobile app locates branches and ATMs as well as offers an easy toggle-out capability to talk with a service representative 24/7.
That doesn’t sound like Chase is trying to limit its mobile banking features at all.
Does your credit union mobile banking app do all of those things? If not, you’re at risk of losing your valuable millennial and more tech-demanding members to these alternative providers like Chase. And by the way, Chase ranked near the top in the J.D. Power customer satisfaction ratings.
The real point is this. Consumers value a rich suite of features within the mobile banking app, but they need to be well-explained, provide for a simple user interface and be accompanied by proper push marketing efforts.
Conspicuously missing from the J.D. Power Banking Mobile App Satisfaction Study were the consumer ratings of challenger bank apps like Chime. Of course, these fintech disruptors are doing things that banks and credit unions seem reluctant to do. When you go to the app store and read the description for the Chime banking app, you see these brand promises:
- No hidden bank fees and earn more on your money
- Get your paycheck up to two days early with direct deposit
- Grow your savings automatically
- Track your spending, link with other bank accounts and save money
- Over 30,000 fee-free ATMs
- No minimum balance and no overdraft fees
- Realtime transaction notifications
- Send money to family and friends with Pay Friends
- Deposit checks
- Apple Pay when you forget your wallet
- Move money between your other bank accounts
Chime is a San Francisco–based branchless digital bank that has now surpassed five million FDIC-insured accounts in only five years of operation. It has quadrupled its user base in a single year. They claim to be the largest and fastest-growing challenger bank in terms of accounts and the rate they’re adding them. The company is now valued at $1.5 billion and is venture capital–backed.
Other challenger banks like Green Dot, Revolut, Monzo and N26 have all announced plans to launch in the U.S.
CU Solutions Group and its subsidiary LifeStep Solutions continue on a path to find great features that help credit unions offer members an integrated P2P solution, fractional share investing for small-dollar investing, financial education tools that are mobile-friendly, simple resources for checking and improving credit scores and overall financial health, tools for account aggregation, and other features for helping with home and auto financing and maintenance.
The next version of LifeSteps Wallet will focus on enabling the most essential mobile banking feature enhancements for credit unions. We also plan to assist credit unions with the initial product launch and marketing strategies through the CUSG Marketing Solutions division.
The recent J.D. Power findings emphasize that improperly launched mobile features can negatively affect member satisfaction with the mobile offering. It also stresses that the simplicity of integrated credit card features is appealing, that familiarity with a unique app breeds loyalty and that personalization and curation of content are the next frontier for digital channels.
In this last area, the J.D. Power report says, “The bulk of spending and design activity in the banking and credit card online and mobile app space has been focused on creating rich feature sets and improving usability. As the technologies evolve, the focus needs to shift to personalization, creating a curated user experience that delivers both convenience and streamlined usability.”
CU Solutions Group and LifeStep Solutions look forward to helping credit unions meet this challenge even as the nation’s largest banks and challenger banks are already well down this path of innovation. The race is on, and credit unions need to invest in well-launched and highly targeted mobile banking feature enhancements in order to compete and stay relevant.