In banking, the aim to provide unprecedented convenience through IT has resulted in a new domain called Alternate Delivery Channels (ADC). The concept of ADC is to provide banking services through alternative methods (ATMs, kiosks, internet banking, etc.) instead of making the customer visit the banks’ physical branch. Although ATMs and internet banking have been in existence for 10 years or so in Pakistan, a recent development is the emergence of mobile apps. This is certainly not surprising, as smartphone penetration in Pakistan has steadily increased in the past few years and now stands at approximately eight to 10% (Source: Ansr.io). In another study by Grappetite, a whopping 77% of smartphone users fall in the 21 to 30 age group, of which only 16% regularly buy paid apps, while the remaining 84% opt to download free apps. Sixty-eight percent prefer Android-based smartphones and 24% are iOS users.
Given that banks need to provide services that are both easily and securely accessed, it was a natural progression for them to leverage this platform. Standard Chartered Pakistan launched its mobile app Breeze in May 2013, Burj Bank launched Burj Connect in September 2014 (it was the first Islamic bank in Pakistan to launch a banking app), and UBL launched Netbanking in May 2014. Other banks to have an app in 2014 include JS Bank and Meezan Bank.
The exploration of this platform by local banks is still in its nascent stages and certain factors need to be kept in consideration in order to create a viable app. Apart from employing the optimal technology, it is also important to have the right mindset in order to have a successful mobile app. Here are a few key points:
Although it is a given, the aspect of security in a mobile app cannot be over emphasised. Users need to be completely reassured that their information and transactions are secure, private and with no chances of any loopholes that may allow malicious activity. Even a slight failure in an app’s security mechanisms can result in irrevocable damage to the brand image, not to mention significant monetary losses.
According to Shariq Mubeen, Head of ADC, JS Bank, “JS Mobile incorporates three levels of authentication [instead of the usual two-factor authentication]. The first is physical; every account is linked to an individual SIM; the second is the password and the third is a 4-digit PIN that has to be entered by the user when conducting a transaction. In addition, all transactions are also encrypted.”
Simplicity in navigation
A basic banking mobile app provides the facility to have access to account balance, generate statements, pay utility/mobile bills, and transfer funds (within and between different banks). The more features an app provides, the greater the need to keep it simple and easy to navigate. In Mubeen’s view, a seamless, feature-rich and secure experience is extremely tricky to attain, but if achieved can make an app stand out from the rest.
Have local context
Banks needs to leverage local user insight and market dynamics in their mobile development. For instance, despite Wi-Fi, 3G/4G rollout, internet speed and penetration is significantly slow compared to the developed world. A Pakistani bank needs to realise this limitation and work around this. One way is to conduct as few ‘online’ transactions as possible and house the app on the device itself, rather than loading every single page every time; basically, sending data packets as little as possible. Another option is to have a dual model in place – giving the user the choice to send data packets (transactions) via SMS or GPRS. The option to incorporate local languages, especially Urdu, can also be explored. However, none of the banks have really tapped into this yet.
Make use of mobile-first features
The next step in leveraging the mobile platform is to utilise device-specific capabilities such as GPS and camera to provide an even greater personalised experience. Ultimately, for a bank it’s about being available to customers at all times and seamlessly seeping into their lifestyles as their primary source for banking. Mapping branches and ATMs on Google Maps and then using the handset’s GPS feature to find the nearest route is one way of leveraging mobile-specific capabilities. Although JS Bank is a relatively small bank, banks with larger branch networks such as HBL, MCB, Standard Chartered Bank, UBL, etc., have more scope to organise and present similar information to their customers. Important details for each branch/ATM location can easily be integrated within Google Maps. Another way to use GPS is to generate profile and time-based reminders for users. For example, if a customer is in the vicinity of an often visited restaurant at lunch time, a message can be sent about the discounts offered there by the bank’s credit card. It is about hitting the right customer at the right time.
Caveat: But with great access to information, come wider privacy issues. There is a very fine line between being conveniently present and being unbearably intrusive. Apps have to provide the feature to opt-out of these alerts at any given time. Furthermore, features which centre around data-mining need to be rolled out slowly, with the frequency increasing only if the customer is responsive. The app has to be intelligent, sensitive and flexible – a rare gem indeed!
Alleviate load from branches
Conducting basic and intermediate-level transactions via mobile apps significantly reduces traffic to the physical branches. According to Omer Salimullah, National ADC Manager, Meezan Bank, “E-banking channels have come a long way in reducing customer traffic in branches as customers don’t need to worry about branch timings or location in order to perform their transactions.”
The operational cost of maintaining an entire physical branch is much higher and the more people use these apps, the less will they come to the branch or call the call centre. This in turn will improve the quality of service for customers who do visit the branches. On the other hand, ‘distance banking’ services such as Easypaisa and Mobicash are also playing an implicit role in creating growth opportunities for mobile apps. While the average user profile of Easypaisa-like services (low-mid SECs) is different from those who download mobile apps (mid to high level SECs), the chances of warming to the idea of mobile apps increases significantly due to the mindset that financial transactions can be done via a mobile handset – especially with the increasing availability of mid-range smartphones and feature phones.
Realise that change is constant
A bank’s mobile/ADC team needs to monitor usage patterns and tweak the app accordingly. It is an ongoing process, and for the Pakistani landscape, where this platform is nascent, understanding and changing mindsets and then adding/deleting/tweaking features that are in-sync with the target audience can only be achieved when a dedicated approach is taken. According to Salimullah, “We use Google Analytics for primary data monitoring, and other proprietary tools to have a 360-degree usage view of our app.” The primary factor is to realise that app development is not a one-time activity and requires equal if not more effort to retain users than to just acquire them. “Creating awareness and changing mindsets is a slow process, but it will pick up after one or two years.” Mubeen adds.
Aim to earn goodwill, not revenue
Considering that all the banking apps are free to download, incorporating in-app ads to earn revenue can be tempting. However, any form of advertising within the app (promoting the banks’ offers, partnered offers, ads by other companies) should be used sparingly and subtly, if at all. A mobile app should not be used to earn revenue – its primary purpose should be geared towards providing convenience to the customer.
The road ahead
For every bank – big or small – it is crucial to devise a documented mobile strategy. This includes not only having a mobile app, but also a constantly evolving strategy regarding when and how to roll it out, whether to offer other supporting/standalone finance-oriented apps and enlisting the right partners. Although resisting this paradigm shift will eventually isolate a bank, jumping on the bandwagon unplanned and only for the sake of being on mobile can result in doubt, uncertainty and a constant struggle with ROI. To truly understand mobile, banks and brands in general have to accept that mobile is not the ‘operating term’ here. Instead, real ‘human’ factors create the foundation for mobile as a successful delivery tool.