Is the mobile banking industry taking over traditional banks?

By Otavio Tranchesi, Responsible for the financial industry, AppsFlyer

In the past, it used to be said that people were more loyal to their banks than to their partners. Fast forward to today, we are seeing a significant change in the way customers interact with financial institutions. These days, their common practices tend to include changing banks, having multiple accounts, mobile banking, and using various financial apps.

Across the African continent, mobile technology has played a crucial role in the rise of fintech. The adoption of mobile banking services in Africa is high and Sub-Saharan Africa (SSA) is currently the fastest growing mobile phone market in the world. In the SSA region, it is expected that by the end of 2025, unique mobile banking users will reach 50% of the population. Moreover, the number of smartphone connections in SSA is expected to nearly double to over 678 million by the end of 2025.

Leading mobile-first banks such as Kuda Bank, TymeBank and Bank Zero continue to challenge large established banks by delivering streamlined and robust mobile banking experiences to every one of their users. Other fintech apps have also become popular, including those used for investing, budgeting, buy it now and pay later, cryptocurrency, lending, and other functions.

Building trust between banks and consumers

The banking ecosystems of Nigeria, South Africa and Kenya have witnessed remarkable growth over the past few years. The rise of financial digitalization has led to an increase in the number of new service providers, which offer a wider range of mobile money operators and payment service providers to fintech companies and other service providers. financial. Currently, South Africa is the leading financial center in Africa, with approximately $1 trillion in annual cross-border transactions. Nigeria is currently home to over 200 fintech organizations, not counting fintech solutions provided by banks and mobile network operators, and more than half of consumers in Kenya use mobile banking services.

The sudden rise of digital financial services means that consumer trust and security is vital, as the industry is a commonly targeted sector for cyberattacks. The foundation of any successful connection with a consumer is trust, especially when handling a consumer’s sensitive financial information. In addition to having effective security and fraud prevention measures in place, banks must also effectively communicate their commitment to security. This can be exemplified by offering transparency in their terms and conditions, fees, and human-centric language to gain customer trust.

As such, it is increasingly important for Nigeria, South Africa and Kenya to prioritize financial transparency, with a secure cybersecurity framework and guidelines when users deposit and transfer money. money with their banks.

App adoption trumps acquisition

In the new banking landscape, traditional banks should, at the very least, offer a seamless mobile app solution. Studies have shown that many users in sub-Saharan Africa have successfully adapted to mobile, with more mobile money accounts than bank accounts in several countries. For example, 96% of Kenyan households use mobile money in some way, making Kenya the world leader in mobile money usage. Customers say that when choosing a bank, the ability to have an intuitive mobile app significantly influenced their decision. This is partly because current account consumers appreciate the convenience of app accessibility, where they have the ease of accessing their account without having to constantly enter their bank details. In today’s fierce market, ease of access, user-friendliness, adaptability and high security are expected features that all banks must adhere to to stay competitive.

So, although traditional banks are under constant pressure to innovate, they benefit from a large existing customer base and a strong brand presence. The challenge then is to ensure that their application offering meets customer expectations, and then to prioritize migrating existing customers to their application as a high priority.

QR codes asking questions

In contrast, many mobile-focused fintech organizations place a high priority on user acquisition. Without a pre-existing user base, their main mission is to find a way to attract new users and avoid competition.

An organization can take many routes to achieve this, but one method that always proves popular is through QR codes.

This deep linking technology strategy has ensured the success of many fintech brands. When customers scan the QR code, they are either immediately directed to the App Store to download the app, or to the appropriate location within the app if they already have it installed. QR codes have proven to be a great method for brands to measure the effectiveness of their marketing campaigns as they have access to every data analysis. They can see how often the code was scanned, who was a new customer, who was a past customer, and whether they made purchases or generated revenue.

Consider the case of a customer looking for a new credit card. They locate a bank with a competitive offer, visit their website and start entering the necessary data. The bank provides the customer with a QR code so that he can complete the application and get the credit card inside the app with the aim of attracting additional users to his app. The company can then assess the effectiveness of the campaign and the performance of these users.

Additionally, QR codes can be used to connect the online and offline worlds. For example, including a small QR code on the envelope when sending a new credit card can allow a user to quickly and easily scan it and be redirected to the app.

Is data essential to success?

Data plays a critical role in defining mobile banking success, whether you are a traditional bank or a mobile-focused bank. Organizations that are able to measure the success of their marketing campaigns, whether they are aimed at migrating existing users to the app or acquiring new users, will have a greater advantage over their competitors. Not only will they be able to scale faster, but they’ll have a better understanding of what works, where budgets need to be invested, and what messages and content resonate with customers. This in turn will help businesses attract more customers, increase revenue, grow, and offer more accessible and profitable products and services.

Ultimately, in this new era of banking, consumers are not tied to one company or service. There has never been more choice and flexibility in how people bank and manage their money. The key for anyone operating in this space is to understand what marketing methods will work best and how to cut through the noise. There’s no one-size-fits-all solution, but having a holistic view of the customer journey and being able to measure the success of marketing campaigns are all key to success.

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