The Real Reason Mobile Rules

Consumers appreciate the value of real-time contextual insights.

September 14, 2015

We’re paying so much attention to the medium that perhaps we’re missing the message.

The rapid rise of smartphones and the matching rise in mobile banking transactions are too powerful to miss or dismiss.

If mobile isn’t yet consumers’ preferred method for transactions, it soon will be, as evidenced by their thirst for remote deposit capture, intra-account transfers, and person-to-person payments. And it’s quickly becoming their favorite way to obtain information.

Mobile banking use will double globally in the next four years, a new survey from KPMG predicts. And a growing number of consumers consider a credit union’s mobile banking service a key attraction.

So if mobile is the medium, what is the message?

Mobile banking is the nexus that will finally drive advice out of the branch, away from human advisors, and into members’ hands.

The mobile ecosystem allows—even demands—real-time contextual insights. Just imagine advice around these key behavioral vectors:

• Location. Mobile devices know where you are, whether that’s the car dealer, the supermarket, or the mall. Imagine an engine that responded accordingly: Don’t even think about cars over $20,000…. You overspent on groceries last week so shave off $10 this week…. Granny’s birthday is soon, so don’t just shop for yourself.'

Purchase history. Aggregators like and MX, an omnichannel banking technology, allow members to see their spending history across institutions.

Tap into that history with services such as Larky (a Filene partner) to make forward-looking suggestions: You dry clean twice per month, and this neighborhood dry cleaner has a new-customer coupon… Your credit card spending at Nordstrom is approaching your take-home pay levels, so lighten up this week.

Know your customer. A smartphone’s digital signature (location, phone number, biometric identification) means you can rely on these devices to fight fraud, authenticate prospective members, and validate payments (watch for results from MasterCard’s “Selfie Pay” pilot at First Tech Federal Credit Union).

This isn’t just wishful thinking. Several well­backed ventures are racing to become dominant as mobile­-only banking services. Three of the best known are Simple, the United Kingdom’s soon-to-launch Atom Bank, and Moven.

All feature user interfaces that promote fiscal savvy over frivolous spending—a place where credit unions should, likewise, plant their flag. These services focus on overlaying insights and advice over the bare transactions.

And why not? A smartphone follows you out into the world in a way a checkbook or even a living, breathing advisor never could.

These app-first banks revel in native features like receipts pushed to the lock screen, a “Safe to Spend” line, and leading with spending trends rather than ledger rows.

But credit unions aren’t venture-backed startups. So how should we compete?

A recent Filene Research Institute white paper, “Channel Delivery for Tomorrow,” offers three recommendations:

1. Build digital competencies. Although members aren’t yet using all the same functions on smartphones and tablets that they do in traditional online banking or in the branch, their use of those mobile channels is heavy and sure to grow.

We owe it to them to invest heavily in functionality and user interface. That process will make us better digital stewards, able to identify and attack future opportunities.

2. Demand better tools. Most credit unions remain beholden to technology vendors for many layers of the member experience. Ask those vendors for the tools and features you read about in TechCrunch and at Finovate.

Better yet, band together with other clients to demand new features and make their development more urgent.

3. Open up. Some of the best ideas will always come from the entrepreneur community because of its faster pace and varied incentives.

But for all their panache, startups usually lack what you already have: thousands of trusting members in a ready user pool.

Filene meets more than a dozen companies every year that would love to bring their technical solution to a waiting pool of users. They’re out there for the asking.

The noble inclination to do right by members should lead credit unions straight from branch-based member conversations to mobile-first insights.

It’s the right medium. It’s the right message.

BEN ROGERS is Filene Research Institute’s senior research director. Find more insights on this and other topics on Filene's website.