I’ve been thinking about mobile banking apps a lot recently. A couple of weeks ago I saw articles from both Chase & Citi about the importance of their mobile banking app. Each time I was struck by the implication that The App was enough. That The App was the end-game.
I believe this sort of thinking results from a lack of insight about the true implications of mobile. It’s simple transference — we have a website so therefore we need a mobile app. Done. Let’s move on.
This thinking is flawed.
I Was At A Loss For Words
My challenge became finding the right metaphor to help people understand why this thinking is flawed (and what to do about it). Especially since I believe it’s urgent that banks understand this before they get disrupted even further.
I love Facebook as a mobile example. Post IPO Facebook’s stock price dropped. There was a lot of conversation around their relevance in mobile. They’ve since recovered and showed incredible mobile success, so they’re a company we can look to as an example.
As the world has gone mobile, though, Facebook has famously learned that one app to rule them all simply doesn’t work. Instead, complexity and interconnectedness needs to move under the surface, connecting individual apps like a digital Pando Tree.
(Ben Thompson, reporting from Facebook F8 Conference ’14)
As metaphors go, using Facebook, Foursquare, and Google made for a difficult leap of faith from the metaphor to banking. I mean, a bank is a very different company than a software/media company. Or so common thinking goes1.
I needed a better example. I found one in Hotel Tonight.
A Better Metaphor
Hotel Tonight is simple. You need a place to stay for the evening. Open the app and you’re 10 seconds away from finding one2.
You probably think — wait, I can do that on Travelocity, or Concur, or well… any travel site.
Yes, you can. But by focusing on this one use case, Hotel Tonight is delivering a better experience and eating those sites’ lunch.
Back to Mobile Banking Apps
You can do it all in your bank’s mobile banking app, just like in any of the popular travel apps. But the experience sucks. It doesn’t suck because the banking app is bad. In fact, they’re quite good for what they are (though to my earlier point about this being ‘an urgent situation before the banks are disrupted further’, they’re still almost never in any of the top 10 personal finance apps lists). It’s the ‘go to market model’ that sucks. One big app. One big… confusing, complicated, optimized-for-everything (meaning optimized-for-nothing) app.
Money, and therefore banking, is just a platform on which we do other things. Software is disrupting banking with hyper-focus on innovative use cases. Taken in isolation it’s interesting. In aggregate however, it should be lighting a fire under the banks to figure out how to do what Facebook, Google, and others are doing to delight users by building fine-tuned focused experiences.
Who better than the banks to create a ‘money platform’ that enables the banks to leverage their true strengths? It’s the same way Facebook is dominating social and doing a great job pivoting to mobile while protecting themselves from competitors.
Banks are software companies with banking licenses. After all, some banks have more developers than even Microsoft. And like software companies, banks don’t produce anything physical. Are they going to start innovating on mobile, or are they going to act like the legacy software vendors when it comes to SaaS by pretending that it isn’t going to kill their business?
So What Kinds of Apps?
I see 3 opportunities:
- Break down mobile banking apps into smaller applications with better individual experiences.
- Create apps for specific personas.
- Create apps around specific products.
On this last point, research shows that prosumers rank their banks much more highly than regular consumers.
Why not create apps with the intention of turning consumers into prosumers… thereby driving brand loyalty?
Why limit apps to banking, why not expand the thinking to personal finance? There are a ton of cool apps that would add value to people’s banking experiences if they were more tightly integrated into the bank’s offerings. Want to find them? Search for “top personal finance apps”… you certainly won’t find any mobile banking apps on the list3.
Coincidentally, Fred Wilson posted on this topic the same day I did. He uses a great phrase — app constellations to describe this trend.
- We may give lip service to ‘every company is a software company,’ but it’s a position that’s not yet embedded in our intuition or muscle memory when we approach banks to sell them software or solutions [↩]
- This is how they phrase it in their app store screen shots. [↩]
- Except sometimes Wells Fargo. [↩]