How Banks Are Using Apps to Improve Customer Relations

Banks are finally realizing that there is a new channel out there, and it is not going away. Mobile banking usage continues to grow, and banks are slowly starting to release applications that attempt to attract and retain more customers. This is usually the first step before banks start to charge for these kinds of services, but nonetheless, it represents a huge technological leap forward for the banking industry. 

Many institutions have introduced smartphone applications that allow customers to deposit checks simply by taking a photo of the document. At Bank of America, for example, more than 100,000 checks a day are deposited by people taking pictures of them with their smartphones. 

While mobile banking represents 8% of all banking transactions, compared with 55% for online banking, according to AlixPartners LLP, about 50% of consumers who own a smartphone and switched financial institutions did so because mobile banking factored into the decision. That stat is up from 7% three years ago. 

I’ve written a lot about how banks could be using smartphone applications to improve customer service and be more innovative. Now that banks have rolled out mobile check deposit, it appears as though the next frontier is mobile bill pay. The Wall Street Journal article uses First Financial Bank in Texas as an example. Bank customers can make bill payments by snapping a picture of their bill payment coupon. The photo is a screenshot from First Financial’s homepage touting the new feature. 

Auto lenders can, and should, take a page from this playbook and use mobile applications. Doing so would not only make lenders appear more innovative and forward-thinking, it could also significantly reduce expenses by allowing banks to use their employees more efficiently. 

A bank technology executive quoted in the referenced article goes as far as to predict that apps will be used for customers to apply for credit cards and mortgages. It’s easy to see a world where auto loans are included in that prediction, too.