At the far end of the banking and payment apps maturity curve waits Loyalty based functionality. A unique blend of brand awareness, emotional connection, and enticing content, Loyalty is what transcends the pure functionality of account management and payments into an emotional glue. This glue enriches the customer connection and increases company profitability. The final of four entries, this section will review our ten companies against 9 Loyalty capabilities including Offers, Rewards, and Social Media.
Ad Free, for now: Thus far, none of the true bank and payment apps show third party advertisements on their apps. As mentioned before, Mint.com is the exception since it is an information aggregator and ads are its prime revenue model. That said, if it can work for a Mint.com, it is not inconceivable to imagine a low-frills bank option that shows ads in return for free checking or other perks. Most apps in other categories use the same approach so it is not a stretch to consider it in banking and payment.
Really, no Account Benefits? By far the biggest gap I identified in all four sections of this review is the almost complete lack of product benefit information. Most credit cards and even debit cards come with some package of benefits like extended warranty, fraud protection, discounts with cobranded partners or limited rental car insurance. You probably accepted a costly acquisition offer because of these benefits. But now the company has spent all this money to acquire you, do they really want you to forget about the same features that prompted you to sign up?
Since these benefits can cost money to fulfill, it’s easy to imagine why some companies would purposely avoid reminding you of them. But this thinking is penny wise and pound foolish. In the 2011 JD Powers US Credit Card study, customers of the 5 in a row winner, American Express, could recall 3.4 product benefits as compared with the industry average of 1.3 benefits recalled. It is therefore no surprise that American Express is the only company reviewed that reminds app users of the many benefits related to their specific products.
No Prizes and No Fun: One thing that’s clear from the apps reviewed: finance and payments are all business and no play. Unlike mobile carrier apps, Contests and Giveaways are completely absent. So too are relevant local Events missing from most of the apps reviewed. How boring! For some reason many companies believe they can just convince me to change my behavior for their benefit (think turning off paper statements or ceasing to make payments over the phone) without some type of enticement. Sooner or later banks are going to realize you catch more bees with honey than vinegar.
Location Based Offers Are Here: Offers for discounts or double points triggered by your location are a key differentiator for the payment apps compared with the banking apps. While still limited in the number of merchants that actually accept them, payment companies are jumping into the estimated $1BN market for daily and location based deals currently dominated by Groupon and Living Social (estimate provided by BIAKelsey Analysts. Click here for a cool infographic on the hyperbolic growth of this industry).
Done correctly, this would be a huge win for all parties. The customer gets a thrill and a discount. The merchant can leverage advanced segmentation capabilities based on rich customer data from the bank/ payment company to target specific deals and drive more profitable traffic than Groupon can. Finally the bank or payment company gets loyal customers and profits from the discount rate on their increased spend.
Don’t you Want to Cross Sell me? Because I work in the cross sell side of the credit card business, I am keenly aware of how profitable making relevant upsell offers to existing customers on the phone. Banks and Credit card companies are going to wake up soon and realize they have been too successful in driving transactions to the web and mobile and miss the cross sell revenue they have become accustomed to. At that time, we will see more interest in adding offers for upgraded products, additional cards, insurance, and other product extensions. For now, only AmEx, Google Wallet and Mint offer these on their apps.
Rewards are Still Just Point Values: Only banks and credit card offer rewards so this section only applies to them. That said, the rewards information is just a simple reward balance. No redemption opportunities, no information on recent earn, no buzz. For a program that is designed to instill loyalty, these mobile apps fail to impress. It would be great to be able to use my reward points for actual in-person purchases. Or get special points bonuses for using my card at some combination of merchants or categories (think consumer based scavenger hunt a la foursquare)
How Social is your Payments App? Sure all of these companies have a Facebook presence, but not all of them enable you to reach it through their apps. This is an immediate opportunity for companies to encourage app usage and create greater linkage between their many faces and a single customer interface. But aren’t your finances a personal affair? The details of your actual balances and activity may be, but if the goal is to instill loyalty and repeat usage, finance apps need to do a better job of transcending this perceived barrier and finding ways for customers to link with their social networks to deliver greater stickiness and value.
In summary, Mobile Banking and Payment Apps are still a long way from reaching their potential. More of an extension of tradition bricks and mortar functionality, they have been successful at shifting service volume from high cost to lower cost channels. In the process, however, banks and payment companies are waking up to the fact that the mobile app functionality is the competitive landscape.
In the foreseeable future there will be no reason a customer must to go to a physical location for their banking and payment needs. Its here where the established banks have the most to lose, since this shakes the very foundations of competitiveness that defined historical banking: deposits, locations, and fees. Instead, the convenience and added benefits of geolocation, information aggregation, deals, and loyalty creates a new playing rich with opportunities for winning companies to create incremental customer and shareholder value.
Ad Free, for now: Thus far, none of the true bank and payment apps show third party advertisements on their apps. As mentioned before, Mint.com is the exception since it is an information aggregator and ads are its prime revenue model. That said, if it can work for a Mint.com, it is not inconceivable to imagine a low-frills bank option that shows ads in return for free checking or other perks. Most apps in other categories use the same approach so it is not a stretch to consider it in banking and payment.
Really, no Account Benefits? By far the biggest gap I identified in all four sections of this review is the almost complete lack of product benefit information. Most credit cards and even debit cards come with some package of benefits like extended warranty, fraud protection, discounts with cobranded partners or limited rental car insurance. You probably accepted a costly acquisition offer because of these benefits. But now the company has spent all this money to acquire you, do they really want you to forget about the same features that prompted you to sign up?
Since these benefits can cost money to fulfill, it’s easy to imagine why some companies would purposely avoid reminding you of them. But this thinking is penny wise and pound foolish. In the 2011 JD Powers US Credit Card study, customers of the 5 in a row winner, American Express, could recall 3.4 product benefits as compared with the industry average of 1.3 benefits recalled. It is therefore no surprise that American Express is the only company reviewed that reminds app users of the many benefits related to their specific products.
No Prizes and No Fun: One thing that’s clear from the apps reviewed: finance and payments are all business and no play. Unlike mobile carrier apps, Contests and Giveaways are completely absent. So too are relevant local Events missing from most of the apps reviewed. How boring! For some reason many companies believe they can just convince me to change my behavior for their benefit (think turning off paper statements or ceasing to make payments over the phone) without some type of enticement. Sooner or later banks are going to realize you catch more bees with honey than vinegar.
Location Based Offers Are Here: Offers for discounts or double points triggered by your location are a key differentiator for the payment apps compared with the banking apps. While still limited in the number of merchants that actually accept them, payment companies are jumping into the estimated $1BN market for daily and location based deals currently dominated by Groupon and Living Social (estimate provided by BIAKelsey Analysts. Click here for a cool infographic on the hyperbolic growth of this industry).
Done correctly, this would be a huge win for all parties. The customer gets a thrill and a discount. The merchant can leverage advanced segmentation capabilities based on rich customer data from the bank/ payment company to target specific deals and drive more profitable traffic than Groupon can. Finally the bank or payment company gets loyal customers and profits from the discount rate on their increased spend.
Don’t you Want to Cross Sell me? Because I work in the cross sell side of the credit card business, I am keenly aware of how profitable making relevant upsell offers to existing customers on the phone. Banks and Credit card companies are going to wake up soon and realize they have been too successful in driving transactions to the web and mobile and miss the cross sell revenue they have become accustomed to. At that time, we will see more interest in adding offers for upgraded products, additional cards, insurance, and other product extensions. For now, only AmEx, Google Wallet and Mint offer these on their apps.
Rewards are Still Just Point Values: Only banks and credit card offer rewards so this section only applies to them. That said, the rewards information is just a simple reward balance. No redemption opportunities, no information on recent earn, no buzz. For a program that is designed to instill loyalty, these mobile apps fail to impress. It would be great to be able to use my reward points for actual in-person purchases. Or get special points bonuses for using my card at some combination of merchants or categories (think consumer based scavenger hunt a la foursquare)
How Social is your Payments App? Sure all of these companies have a Facebook presence, but not all of them enable you to reach it through their apps. This is an immediate opportunity for companies to encourage app usage and create greater linkage between their many faces and a single customer interface. But aren’t your finances a personal affair? The details of your actual balances and activity may be, but if the goal is to instill loyalty and repeat usage, finance apps need to do a better job of transcending this perceived barrier and finding ways for customers to link with their social networks to deliver greater stickiness and value. In summary, Mobile Banking and Payment Apps are still a long way from reaching their potential. More of an extension of tradition bricks and mortar functionality, they have been successful at shifting service volume from high cost to lower cost channels. In the process, however, banks and payment companies are waking up to the fact that the mobile app functionality is the competitive landscape.
In the foreseeable future there will be no reason a customer must to go to a physical location for their banking and payment needs. Its here where the established banks have the most to lose, since this shakes the very foundations of competitiveness that defined historical banking: deposits, locations, and fees. Instead, the convenience and added benefits of geolocation, information aggregation, deals, and loyalty creates a new playing rich with opportunities for winning companies to create incremental customer and shareholder value.
Comments
Post a Comment