Following a visit to this year’s SMART Summit, a rising theme was online banking and the emergence of mobile-only markets.
I recently had the opportunity to visit the START Summit which took place in Saint Gallen, Switzerland for two days in March – attracting over 2,000 students, visitors, corporates and investors from all over the world. It focused on today’s leading technologies which included blockchain technology, artificial intelligence, internet of things, argument/virtual reality and medtech.
The START Summit had many interesting speakers, including Tony Fadell the founder and former CEO of Nest Labs, Shai Wininger who co-founded Lemonade and fiverr.com and Rafael Grossmann who was the world’s first surgeon to use Google Glasses.
But one of the most interesting parts of the conference for me personally was the ‘fireside chat’ with N26 and Deutsche Bank. This discussion saw Valentin Stalf, Founder and CEO of N26 and Michael Koch, Head of Digital Factory & Online and Mobile Banking at Deutsche Bank articulating the changes and disruption in the mobile app banking industry.
NUMBER26 (N26) is a mobile-only bank which claims you can open a bank account in just 8 minutes by completing a simple signup form and video identification check. Since N26 is a mobile-only bank you will not find any physical branches in your local high street, as everything is completed via the app. N26’s mission is to make banking easier by using a simpler user interface and by removing the unnecessary things that make traditional banking less intuitive.
Why mobile-only banking?
Now that smartphones are a common part of our daily lives, businesses and banks alike are tapping into this growing market by developing mobile apps. Most banks, such as Deutsche Bank, will already have a mobile app which is an enhancement to their existing service, rather than the app monitoring and controlling all banking functions itself like N26.
Tasks such as the ability to customise the information you see, lock your card, change your pin number or order a replacement card can all be done easily and quickly from within the N26 app. Most of these tasks cannot be done with a traditional banking app, instead you must telephone or go into the bank itself and ask.
Another perk of a mobile-only bank account is the savings and interest rates. You will most likely find that they offer more competitive interest rates and savings to customers because they do not have the significant business overhead of physical bank branches such as premises, infrastructure, staff and running costs.
N26 says that it has tripled its user base over the past 12 months, with over 300,000 customers. As a fully licensed bank, it operates in 17 countries in Europe and has handled transactions exceeding 10 million pounds in the past year.
The mobile-only banking user experience
An important part of mobile-only banking is how the app looks and functions. N26 have invested a significant amount of time into developing a good user interface and experience for its customers. The app has many features that are only unique to the N26 app. These carefully considered features let users customise what their debit card can do. For example, you can set your own daily spending and withdrawal limits, turn ATM transactions on and off or enable real time notifications every time a transaction is made.
The core consideration of user experience is the user interface (UI). A UI put simply is the way a user interacts with an application. A UI usually consists of a set of commands, buttons or menus through which a user carries out tasks in an application. If you have an application with a poorly designed UI you will find it will have little value when it comes to a user experience rating.
N26 for example have adopted a minimalistic UI design which consists of whitespace, clean lines, simple colour scheme and minimal graphical elements. Having this clean uncluttered UI makes the app much easier to user and understand as the user will be able to focus on the elements that matter.
The problems with mobile-only banking
Although mobile-only banking has many interesting and appealing features it does have downsides which may affect how fast it grows. Firstly, a mobile-only service means people who don’t own a mobile, or a suitable device, are excluded. This is likely to impact older generations, many of whom perhaps aren’t as willing to embrace mobile technology as the digital savvy millennials. Bank customers are also limited to transferring funds electronically because there are no physical banks or deposit boxes. Lastly, when it comes to customer service you may experience a less helpful or personalised service as everything is run by machines so there is little or no human interaction when it comes to solving an issue with your account.
What next for mobile-only banking?
Having heard first-hand insights from Valentin and Michael, my opinion is that mobile-only banking will really take off in the coming years as technology is moving so fast. The younger generations are now growing up in an age where technology is fully integrated into their daily lives. So, the issues affecting the take up of mobile-only banking will most likely become obsolete. For example, the problem of delivering personalised customer service could soon be solved by using technology such as machine learning where computers can learn from users to provide a tailored, friendly experience. Now that we are happy to control our homes from our smartphones and will be soon travelling around in driverless cars, managing our finances on our phone may not seem such big a deal after all.