Challenger banks ramp up mobile to take bite out of the Big Four, finds new research

86 per cent of challenger banks and building societies report that growing their mobile offerings is a priority for 2016

27/07/2016 London, UK

Challenger banks and building societies are redoubling their mobile banking efforts in a bid to take market share from the Big Four (Barclays, HSBC, Lloyds and RBS), according to new research from Aspect Software. However, according to the customer engagement specialist, a lack of mobile clarity risks stifling their ambitions.

The research, which was conducted by Vanson Bourne on behalf of Aspect, polled 100 senior decision-makers from challenger banks and building societies with an operation in the UK, and found that 55 per cent of these organisations offer mobile banking today. Looking at their reasons for offering mobile services, six in ten see it as a way to improve the customer experience (63 per cent) and attract new customers (61 per cent), while 51 per cent view it as a way of keeping up with the competition. 86 per cent of respondents cite growing the adoption of mobile banking as a key priority for 2016.

However, a number of barriers will need to be overcome if these institutions are to successfully increase the adoption of mobile and unlock the associated benefits – namely, a lack of clarity in their mobile strategies. Just 38 per cent of respondents reported having a completely clear mobile strategy, 42 per cent reported having only partial clarity, and 20 per cent stated that they didn’t have a mobile strategy at all. 

Commenting on the findings, Peter Littlewood, Finance Solutions Consultant at Aspect, said that a clear and well-communicated mobile strategy is essential if banks are to inspire customer trust in their mobile applications, drive usage, and achieve the benefits that mobile can bring their organisations. 

He said: “Mobile banking apps have gone from a ‘nice to have’ to an indispensable part of a modern bank’s service offer, and it’s encouraging that mobile is a core focus for challenger banks and building societies. Customers will typically follow the path of least resistance, and in the world of banking, that path is mobile.

“Applications that are optimised to create frictionless experiences for customers translate, in turn, to tangible competitive advantage,” Peter continued. “Mobile enables customers to self-serve on the go, making it easier for them to carry out simple banking tasks, and meaning that banks can direct their resources at more complex transactions. So it should come as little surprise that such a high proportion of challenger banks and building societies have their sights set on increasing the adoption of mobile services.

“But if you haven’t got a perfectly clear mobile strategy and a strong product to take to market, the odds are stacked against you, and it is clear from the data that the majority have some work to do in that regard. If your banking app is clunky or difficult to navigate, your customers simply won’t use it and the benefits to the wider business won’t be realised. They’ll have a very difficult time convincing customers of the Big Four to take a punt on their services without a convincing and rock solid mobile banking offering,” Littlewood concluded.