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2019 Mobile Finance Trends and Innovations


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The mobile channel has become a strategic priority for financial services firms looking to attract and retain younger clients. Nearly all large and mid-sized financial intuitions allocate sizeable budgets devoted to improving their mobile properties, focusing on mobile app enhancements. In 2018, Corporate Insight’s Mobile Monitor service saw banks, card providers, brokerages and asset management firms update their app capabilities at a rapid pace.

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2019 Mobile Finance Trends and Innovations

  2. 2. CONTENTS CORPORATE INSIGHT 2 INTRODUCTION 2018 Trends & Innovations 2019 & Beyond About Us 3 4 14 20
  3. 3. The mobile channel has become a strategic priority for financial services firms looking to attract and retain younger clients. Nearly all large and mid-sized financial intuitions allocate sizeable budgets devoted to improving their mobile properties, focusing on mobile app enhancements. In 2018, Corporate Insight’s Mobile Monitor service saw banks, card providers, brokerages and asset management firms update their app capabilities at a rapid pace. In our August 2018 survey of consumer bank customers, 92% of Millennials who downloaded their bank’s mobile app indicated that they logged into their accounts at least once a week using the app, with 25% logging in daily. Further, 83% of people who use their firm’s banking app said that mobile capabilities were Very Important or Extremely Important. Our recent surveys of retail investors and retirement plan participants show similar mobile preferences. Collectively, these surveys suggest mobile will continue to play an expanding role in shaping how users interact with their financial services providers this year and beyond. 2019 will see mobile platforms become more intelligent and useful to financial services consumers CORPORATE INSIGHT 3 To accommodate changing customer preferences and the growing significance of the mobile experience, we expect financial services firms to continue to enhance their apps in 2019. Developments may include leveraging such cutting edge capabilities as artificial intelligence (AI) to provide predictive banking, expanded biometric authentication techniques and offering increased access to live CSRs from the mobile channel. Integration and aggregation of accounts is likely to continue to expand in order to provide clients with a holistic view of their financial situations from their mobile phones. In this annual mobile trends review, we explore these and other trends and innovations that are likely to shape the mobile experience this year and beyond.
  4. 4. CONTENTS CORPORATE INSIGHT 4 Introduction 2018 TRENDS & INNOVATIONS Virtual Assistant Improvements Increased Digital Wallet Usage iOS Platform Enhancements Mobile-Based Customer Service Enhanced Mobile Education Integration & Aggregation Challenging Challenger Banks Simplified App Navigation 2019 & Beyond About Us 3 4 5 6 7 8 9 10 11 13 14 20
  5. 5. As of January 2019, eight firms in the Mobile Monitor coverage group offer a proprietary virtual assistant within their mobile apps, while several more support third-party platforms like Amazon Alexa, Siri or Google Assistant. Our 2018 Consumer Banking Survey found that 31% of respondents rated the availability of a virtual assistant as Very Important or Extremely Important. Virtual assistants are becoming smarter and more effective CORPORATE INSIGHT 5Bank of America Erica Funds Transfer Ally Assist Transaction History • Ally Assist and Bank of America’s Erica are the most sophisticated in-app virtual assistants o Both tools allow clients to filter results when they retrieve key account information, transfer funds, pay bills and filter recent transaction results o Erica, new in 2018, allows clients to activate new cards via the tool and learns more with each app update • E*TRADE’s voice assist can provide pre-filled trade tickets, while virtual assistants from USAA and U.S. Bank respond to commands by providing links to the related app sections • More basic virtual assistants available from American Express and Citi use the tool as a way to inform live customer service representatives about client inquiries before transferring users directly to them for a live chat session
  6. 6. Digital wallets add convenience and ease of use to the traditional payment process, eliminating the need to manually type in card details when making purchases online and in apps. To date, consumer adoption of major digital wallet platforms (e.g., Apple Play, Google Pay and Samsung Pay) has been low, but improved technology and increased merchant availability could lead to a significant rise in usage. Firms allow users to activate digital wallets directly from apps CORPORATE INSIGHT 6Bank of America App Card Settings PNC Card Settings PNC Device Management • 56% of the firms in Mobile Monitor offer direct enrollment in Apple Pay, the most common option o These numbers drop for Samsung Pay (38%), Google Pay (31%), Visa Checkout (19%) and Masterpass (6%) • Bank of America offers the widest variety of wallet types and includes direct links for Apple Pay, Google Pay, Samsung Pay, PayPal, Masterpass and Visa Checkout • PNC Bank also stands out for providing the ability to view, suspend and reactivate digital wallets across operating systems and platforms
  7. 7. Several banks and brokerage firms now leverage iOS device enhancements, including more advanced app integration with Siri and Business Chat. Additionally, with the release of the iPhone X, Face ID authentication is now ubiquitous. Firms expand support for Siri commands and native iOS features CORPORATE INSIGHT 7 BB&T Siri-Based P2P Payment TD Ameritrade iOS Business Chat • Siri updates include the following: o Bank of America, Citi, U.S. Bank and USAA all added the ability to retrieve account details using Siri o BB&T clients gained the ability to initiate Zelle P2P payments using Siri o USAA and E*TRADE are the first in the Mobile Monitor coverage set to add Siri Shortcuts • Discover and TD Ameritrade added iOS Business Chat to help users expedite the process of contacting companies using Spotlight, Maps and Siri • TD Ameritrade extended iMessage capabilities to allow users to share U.S. markets overview or security quote data with contacts via iMessage
  8. 8. • Firms added new capabilities to improve access and engagement with CSRs, specialists and advisors o Bank of America and Citi both added the ability to schedule an appointment with a banker through the app o Ally added a message center to its app, along with the ability to attach files to messages o Merrill Lynch added the ability to scan and send documents to advisors • Firms also made documents available via the mobile app o TIAA added access to tax statements o Merrill Edge/Lynch and Ameriprise added access to statements and additional account documents Improving customer service capabilities was an area of focus CORPORATE INSIGHT 8 Citi Appointment Scheduling Ameriprise Account Document Archive Ally Message Center
  9. 9. Personal finance and educational content are increasing in value on the mobile platform. Over a quarter (27%) of mobile users from our 2018 Consumer Bank Survey stated that having access to educational content that covers a wide variety of financial topics within their bank’s mobile app was Very Important or Extremely important. Brokerage firms build out in-app educational resources CORPORATE INSIGHT 9 TDA Mobile Education Section Fidelity Learning Center TDA Mobile Trader Trader Education Section • Multiple firms updated the educational resources available within their mobile apps in 2018 o TD Ameritrade added educational videos to its primary mobile app. The firm also added Trader Education videos to its secondary Mobile Trader app, designed for active traders o Fidelity increased the number of Learning Center modules
  10. 10. Providing a holistic view of clients’ entire financial lives became a primary focus for firms this year. Multiple banks and brokerages improved integration of different account types within the mobile platform, with leading firms offering aggregation of external accounts as well. • Notable changes related to account aggregation came from Charles Schwab and Citi o Citi implemented a new platform on its mobile app that leverages aggregated data for spending analysis and budgeting tools, which are available to non-Citi customers who create profiles and link external accounts o Charles Schwab added existing external account management—from the desktop site—to its app Firms improved account aggregation and integration CORPORATE INSIGHT 10Citi External Account Aggregation and Analysis Charles Schwab External Account Linking 1
  11. 11. Improved integration came in many forms, from consolidating features to integrating account applications o Ally and Citi both added deposit account applications to their apps, available to both new and existing clients o Ally also improved CD account management by adding related functionality to its app o Capital One discontinued its separate Wallet app and added card-locking functionality to the main app o Bank of America and Merrill Edge added cross links that open the other app and automatically authenticate users Firms improved account aggregation and integration CORPORATE INSIGHT 11Ally App Account Application Citi App Account Application Bank of America App with Link to Merrill Edge App 2
  12. 12. Challenger banks made ripples in 2017, eating into the core client-base of incumbent banks by offering innovative digital platforms and tools; 2018 saw incumbents fight back by launching their own standalone mobile-first platforms Incumbents begin to challenge Challenger Banks CORPORATE INSIGHT 12Chase Finn App Wells Fargo Greenhouse App • Chase and Wells Fargo both launched mobile-first banks in 2018 o Chase introduced Finn in June 2018 as a standalone mobile bank o Wells Fargo announced its mobile checking account, Greenhouse, in late 2017 and rolled out a beta offering throughout 2018 • Like other innovators, these offerings carry no fees and cannot be overdrawn • Both apps employ minimalist designs while offering robust PFM tools o Finn users indicate transactions as wants or needs and rate them with emojis to power Autosave Rules o Greenhouse transfers money from the Set Aside to the Spending account every week for budgeted spending
  13. 13. • Prudential, VALIC and Fidelity redesigned app navigation for retirement plan participants, implementing horizontal tab menus • Ally streamlined its extensive vertical slideout menu by introducing a four-tabbed horizontal menu, including a customizable Tasks option • Robinhood removed the hamburger menu and organized its app into four main tabs to incorporate the new—and short- lived—Checking & Savings service More apps are employing horizontal tabbed menus for navigation CORPORATE INSIGHT 13Fidelity App Robinhood AppAlly App Several firms made navigation enhancements to simplify the ease of use for their mobile apps. Firms shifted their design techniques to provide a tabbed menu at the bottom of the app interface instead of the previously popular hamburger flyout menu. In a 2016 Corporate Insight usability test, participants overwhelmingly preferred horizontal tab menus over vertical slideout menus.
  14. 14. CONTENTS CORPORATE INSIGHT 14 Introduction 2018 Trends & Innovations 2019 & Beyond Real-Time Payments to Appear Direct Access to CSRs via Apps Advanced iOS Capabilities Re-Bundling Platforms Predict Banking Enhancements About Us 3 6 14 15 16 17 18 19 20
  15. 15. The Clearing House does not expect most banks to provide real-time payments until 2020, despite the push for this function beginning in 2015. While firms hesitate due to potential profit loss, we anticipate this function growing in importance to consumers and becoming an expectation, especially from younger customers. • PNC Bank is one of the only major banks with real-time payments and is doing so with a 2% fee for instant transfers o It is likely other will join PNC in 2019 • Other competitors within and outside of the financial services industry are exploring instant fund access options o Uber partnered with GoBank (Green Dot) and charges a $5 flat fee for drivers to have same- day access to funds – Instant Pay allows users to transfer funds to the Uber Debit Card from GoBank up to five times per day with no fee o Square also charges a flat fee for instant access to funds via Square Cash o Venmo allows for instant transfers to its own branded debit card with a 1% fee (with a $0.25 minimum and $10 maximum) – This fee monetized Venmo for PayPal o Walmart employees can access funds from their paychecks before their payday with Even Challengers may succeed in providing real-time payments CORPORATE INSIGHT 15 Venmo App Transfer Balance
  16. 16. Many banks and brokerages will begin providing access to CSRs via Live Chat or messaging interfaces in order to resolve account issues • Live Chat and secure messaging are effective communication tools to simplify the user experience by providing timely assistance at a low cost to the firm o For Millennials and subsequent generations that came of age in the era of texting, email and messenger apps, picking up a phone to place a call for assistance is a last resort • American Express, Citi, Discover, E*TRADE, Merrill Lynch/Merrill Edge and USAA already provide in-app live chat or instant messaging; more firms will join them in 2019 Firms will provide access to CSR directly within apps CORPORATE INSIGHT 16 E*TRADE ChatAmerican Express Message Us
  17. 17. There has been considerable emphasis on integration with device-based virtual assistants like Siri and Google Assistant in order to streamline mobile usage. Going forward, we anticipate that integration with these device- based assistants will become increasingly common as well as more sophisticated, allowing clients to perform a wider variety of functions without opening the app. • Such interactions may include: o Locking a card o Scheduling recurring payments o Setting travel notices o Placing a trade o Researching investments Firms will further integrate with third-party virtual assistants CORPORATE INSIGHT 17 Discover Card Siri Interactions
  18. 18. • In 2019, apps will seek to create hubs for users’ entire financial lives, through integration of new product types or aggregation platforms o In 2018, several firms implemented these solutions (slides 11–12) • Innovators like Acorns, Qapital and Stash— covered in our Q4 Mobile Innovators report—are already expanding beyond initial offerings with suites of investment, retirement and checking products o Robinhood indicated similar moves with the Checking & Savings product, announced December 2018—though it retracted the product after criticism from the SIPC • In addition to a robust suite of products, firms can create a consolidated platform by aggregating account information from other firms o APIs—such as those Wells Fargo plans to embrace—will play a large role in sharing this data Comprehensive platforms will cover users’ entire financial lives CORPORATE INSIGHT 18 Stash Banking and Retirement Promotions Robinhood Checking & Savings Promotion
  19. 19. Wells Fargo made headlines in 2018 when it announced it would integrate predictive analytics into its mobile banking platform to provide customers with a better understanding of their spending habits. The tool allows users to receive proactive alerts based on expected upcoming expenses and makes suggestion based on financial activity. Incorporating predictive analytics into the mobile experience was expected to take off in the financial services industry in 2018, however, there was a bit of a learning curve that prevented many firms from launching similar features. • We believe that predictive analytics will see many enhancements in 2019, especially from smaller, more nimble startups that are not saddled by incredibly large data sets • Predictive banking is likely to become more proactive as well. Possible advancements could include: o Automatically completing transfers on the user’s behalf to accommodate for an unforeseen expense or upcoming bill o Creating tailored payment plans for loans and mortgages based on spending habits o Helping to make recommendations for future purchases and include examples of cheaper alternatives Predictive banking will increase in sophistication CORPORATE INSIGHT 19
  20. 20. CONTENTS CORPORATE INSIGHT 20 Introduction 2018 Trends & Innovations 2019 & Beyond ABOUT US About Corporate Insight About Mobile Monitor 3 6 14 20 21 22
  21. 21. • Corporate Insight is a New York-based research and consulting firm that helps financial institutions improve their customer experience and establish a competitive advantage • Our Monitor research offers ongoing competitive intelligence by industry vertical, reporting on the customer experience from a unique firsthand perspective • Our Consulting solutions include a range of strategic and tactical research services, with a focus on emerging technology and disruptive forces. Our services include: o Custom research, including mobile-focused engagements o Survey research, including investor, retirement plan participant and bank customer surveys o Industry-wide studies on key topics (e.g., Next-Generation Investing, Millennials, Financial Wellness, etc.) o Website and Mobile Audits • For more information on Corporate Insight, please contact us at 212-832-2002 or by email About Corporate Insight CORPORATE INSIGHT 21
  22. 22. • Mobile Monitor is Corporate Insight’s subscription research service that tracks mobile development across the bank, brokerage, credit card and asset management industry segments • We provide our subscribers with the following: o Bi-weekly Updates reporting on mobile platform developments at 25 financial services firms o In-depth quarterly Reports on such topics as: – Mobile Innovators – Digital Wallets – Virtual Assistants – Account Information – Account Opening o Quarterly capabilities matrices and films o Analyst support About Mobile Monitor CORPORATE INSIGHT 22 Mobile Monitor’s Cross-Industry Coverage Set