With the evolution of smartphones, mobile apps took over almost every sector of the market, and mobile banking is no exception. Because of the convenience and freedom of managing finances, mobile banking gets a rapid adoption. Money transfers, bill payments, and purchases become easier and faster.
That is why banks are looking to develop strategies to enable the customers to access their accounts via smartphones. And mobile banking solution serves as a potential catalyst for generating operational efficiencies and as a vehicle for alternative revenue sources.
In this blog, we will show you what a mobile banking solution is. Also, we will discuss with you the challenges and advantages of mobile banking technology.
What is mobile banking?
Mobile banking is a service provided by a bank or a financial institution to conduct monetary transactions over mobile devices. This activity can be as simple as a client paying bills or sending money abroad. Today, many banks and financial institutions leverage mobile applications for multiple activities such as potential fraud alerts and bank account maintenance updates.
Mobile banking softwares offers unparalleled convenience to their users by allowing them to access major banking services on their smartphone. Clients can now check their balances, view their bank statements digitally, transfer money, and can purchase prepaid services. Furthermore, mobile banking apps provide transactional abilities and advanced user interfaces.
4 crucial challenges of mobile banking
The growth of mobile banking has also created new opportunities for fraudsters, giving malicious actors new inroads into our bank accounts and personal data. But what are these challenges? Let us see.
- Authentication issues
Mobile PINs are losing their credibility as the authentication mode because of password and identity thefts. Customers use a PIN or Password for the security of mobile payments. Chances are they may be stolen by a hacker if a mobile device has been lost.
Mobile banking is quite popular among the millennial generation. But it seems that the older generation is not comfortable with it. Older people are still skeptical of banking technology. These older people are still using the same old payment methods because of the fear of financial frauds.
- Scalability issues
With increased expectations of banking solutions by customers, banks will continuously expand their payment channel. This need for expansion has created an urgency to have a digital banking solution in place that can be scaled quickly.
To solve this concern, banks need to invest into a best in class mobile finance solution. Moreover, banks need to ensure that their banking app can run on popular platforms such as Android, iOS and web.
Compatibility issues hinders the growth of a banking app. Some mobile banking apps are compatible with the latest mobile OS versions. It may happen that they can not work on a smartphone running with the older version. So, check out if your device OS version is compatible to run the app.
5 significant benefits of mobile banking for banks
Mobile banking provides multiple profitable opportunities to banks. It also helps them to reduce their overall costs. But the benefits of banking are not just limited to this. There are also many more, let us look at them one by one:
1. Ease of access
Mobile banking offers unmatched convenience and accessibility to consumers. Thanks to cutting edge banking apps, customers do not have to worry about bank holidays, tiresome queues, or complex banking procedures.
If you offer your customers smoother banking and payment, they must remain constantly vigilant to mobile banking security threats.
2. Better ROI
As per fiserv, banking creates better customer engagement and returns on investment. An average institution can generate a high return on investment and reduce attrition by approximately 15 percent.
Apart from this, banking enables its customers to engage with famous companies and services. They hold more products from banks compared to the customers who are not availing mobile banking facilities. Besides this, banking user attrition rate is comparatively lower than branch-only users.
3. Time saving
Mobile banking solutions can save a lot of time for banks and financial institutions, as clients can directly access a majority of banking services over their smartphones.
Mobile Banking has made it possible for you to access your account once the bank’s branch closes for the day. You do not have to wait for the bank for money transfers. You can easily access your account 24X7 and transfer funds via a digital money transfer solution.
4. Strengthens security
Security is one of the most important things for banking. To maximize financial security, banks can use gesture patterns and biometric data like a fingerprint, retina scans, traditional passwords and two-factor authentication.
Apart from this, banks can use encryption to protect financial information and privacy. Also, malware is less likely to threaten an app because of the platform proliferation. Even if your customer lose cell phone, their banking data is safe.
5. Effective marketing
Mobile software can be used as a potential marketing channel. Banks can also use it to conduct highly targeted marketing campaigns. For instance, banks can pinpoint the exact location of shoppers to their customers along with attractive offers.
Moreover, banks can use the banking interface to compile campaigns as per customers’ shopping preferences in real-time. Banks can inform their customers about their latest account opening schemes, insurance offers, and cashback. Banks can use push notifications for this.
The mobile banking sector is on the verge of major transformation. This transformation will lay the roadmap for banking to change the user banking experience forever.
In this blog, we have discussed with you the challenges and benefits of banking. So, partner up with a skilled solution provider that provides you with a next generation banking solution equipped with top-notch features and technology stack.
If you are a bank looking for transforming daily operations, then you can reach us out to know more about a banking solution. Thanks for reading this blog.