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Banks' poor mobile pay experience opens the door for fintechs

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Over the last few decades, mobile technology has broken down the barriers of communication for people around the globe. And as the capacity for communication has evolved, so have the ways in which we use mobile technology to conduct business, access information and oversee the daily minutiae of our lives.

For financial institutions, this reality is no different. Banks have long understood the benefits of mobile to give its customers a fresh and intuitive way to manage their funds and access information on the go.

Mobile banking is, without question, rapidly becoming the status quo for how the majority of people choose to manage their interactions, payment transactions and overall financial management with the banks of their choice. But many financial institutions lack the puzzle pieces for giving their users a good customer experience within their mobile apps, leaving many dissatisfied and looking for a new solution. With digital disruptors, fintechs and payment apps gaining an increasingly larger foothold with younger demographics, legacy banking institutions have an even greater need to understand and overhaul poor customer experience.

It goes without saying that millennials and younger generations are the biggest demographics adopting new technology. But banks have seemingly turned a blind eye. Recent research found that 85.5% of millennials were dissatisfied with their overall digital banking experience.

This negative number can stem from a few different factors, such as a experience, lack of service options or lack of integration with payment technology companies. Ensuring that mobile banking apps take advantage of innovations such as digital wallet for transfer of funds between accounts and friends are a must, as are features that can communicate with customers through the app, SMS and even email. Financial institutions are seeing their efforts on advertising spending being undone when they force customers to print, sign and fax paper for purchases or services, resulting in users abandoning the process and forgoing engagement altogether.

Conversely, digital disruptors are exploiting these process gaps to win over millennials. Mobile banking company, Monzo, for example, was founded only three years ago and has already accrued over 1.2 million customers across Europe (mainly millennials and younger demographics). Companies like Monzo and similar disruptors in the financial services space have cracked the code for engaging with digital natives, offering up convenience, an intuitive customer experience and effective communications strategies that keep their customers informed and educated. If big banks don’t take notes to catch up, they’ll see their market share plummet as older customers age out.

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