Customer-Centric Banking Apps & The Regulatory Shift

Published 11/06/24 under:

The landscape of banking is undergoing a significant transformation, driven by evolving consumer expectations and the introduction of stringent consumer duty regulations in 2023. Banking apps, which have become a primary interface between customers and their banks, are at the forefront of this change. As an industry, it’s crucial to not just discuss improvements but to take decisive actions that centre the customer experience within these digital platforms.

The Changing Dynamics of Banking Apps

Traditionally, banking apps were designed as supplementary tools to support branch and telephone banking services. However, the paradigm has shifted, and these apps are now the primary mode of interaction for many customers. This transition presents a unique opportunity to refine these digital experiences to mirror the personalised service of a branch, but with the convenience and accessibility of technology.

Understanding Consumer Needs

To align banking apps with consumer expectations, we conducted a comprehensive survey involving 1,700 customers. The findings were revealing. Although 93% of respondents expressed satisfaction with their banking apps, 22% still felt the need to contact call centres or visit websites to complete their banking tasks. This indicates a significant gap in the digital journey that needs addressing. One in five users found navigation within their apps confusing, highlighting the necessity for banks to prioritise intuitive design and seamless user experiences. Security remains a crucial concern, with 35% of customers finding current authentication processes overly time-consuming. The adoption of biometric technologies such as facial and fingerprint recognition is a step in the right direction, but these methods must be integrated consistently throughout the app experience.

Key Areas for Improvement

Personalised and intuitive design is essential. Apps should be designed to cater to diverse customer needs, ensuring accessibility for all demographics. This means taking a human-centre design approach to user experience, including conducting extensive user research. Through this approach we can create apps with intuitive navigation, clear instructions, and a user-friendly interface that accommodates users of varying tech-savviness and with different accessibility needs. Security protocols should be robust yet unobtrusive. Biometric authentication, once implemented, should be utilised consistently to avoid reverting to less secure methods that disrupt the user experience.

Feature relevance is also critical. While customers express interest in advanced features like peer-to-peer payments and virtual savings pots, it’s essential to prioritise features that add real value to specific customer segments. Tailoring features to the actual needs of the user base will enhance satisfaction and engagement. The principle of ‘Know Your Customer’ (KYC) should extend beyond compliance. By continuously updating customer profiles through their interactions with the app, banks can provide more personalised services and relevant product offerings.

Embracing Consumer Duty Regulations

The introduction of consumer duty regulations in 2023 mandates a stronger focus on customer outcomes. Banks are now required to demonstrate that they offer appropriate products and services, tailored to the individual needs of their customers, including vulnerable customers and those with different accessibility needs. This regulatory framework aims to ensure fairness, transparency, and simplicity in financial products.

Practical Steps Forward

To navigate these regulatory changes and improve customer experiences, banks should conduct in-depth assessments, evaluating current app functionalities and conduct user research with customers to identify key pain points and areas for improvement. Investing in human-centred design and technology to create an intuitive user interface and integrating advanced security measures seamlessly is essential. Regularly updating customer profiles using every customer interaction to build a deeper understanding of their needs and preferences will ensure the app evolves with them. Tailoring product offerings using data-driven insights to offer products and services that are genuinely beneficial to each customer segment will further enhance customer satisfaction.

The shift towards making banking apps the central mode of customer interaction presents both challenges and opportunities. By aligning app development with consumer duty regulations and focusing on user-centric design, banks can enhance customer satisfaction and build lasting trust. For a detailed roadmap on how to achieve these improvements, our report offers key insights and practical tips. To further explore these strategies and tailor them to your institution, we invite you to contact us for a complimentary workshop where we can delve deeper into your specific needs and objectives.