Mobile phone is becoming the first interaction channel with banks in France. With the lack of differentiation between offers of competing banks, price differentiation is no longer a viable strategy for the traditional banks. They have to offer a high quality digital customer experience.
In two years, mobile banking adoption rate hasmore than doubled[1] to reach 30%[2].
All indicators lead to believe that from now to 2020 mobile banking will become French peoples’ main media of interaction with their banks ahead of online banking (online bank on computer or laptop) and advisory inagencies.
More than a half of computer and mobile device users are mobile-first. They mostly use their mobile device than their computer to check their bank accounts.
Logically, young generations are very enthusiastic about it. 75% of under 35 years olds log in on smartphone multiple times per week[3].
However, the use of mobile banking remains centered on basic services (93% for balance check, 58% for internal transfer, 30% for external transfer, 9% for budget management and classifications), potentially due to the fact that the number of services is still limited for a majority of banks.
Mobile applications are far more used than mobile web and make it possible to improve user experience.
64,9%[4] of all mobile users (mobile web + mobile apps), log in their account through theirbanks’ mobile applications.
Mobile application makes it possible to leverage the technologies available on mobile devices(camera, contactless technology, biometrics, geolocation, etc.) and to noticeably improve thedigital experience.
Seven years after the launch of the first mobile applications, French banks are still disappointing for many clients.
French banks twelve-months average rate in Apple Store and Android Store is under 3 out of 5(cf. D-Rating report “French Banks Digital Footprint”)
This is far from FinTech mobile applications level of satisfaction:
Banking account aggregator application Linxo is rated 4,6 on the last 12 months on the AppStore
Payment application PayPal is rated 4,6
Immediate payment application Lydia is rated 4,9
The German neo-bank N26 which recently arrived in France is rated 4,5
In these circumstances, the arrival of Orange Bank, which wants to revolutionize the banking sector with a 100% online bank, represents an additional challenge for the historical players.
D-Rating scope of study
D-Rating analyzed 21 banks’ mobile applications present in France
D-Rating compared and analyzed the services on mobile applications of 12 traditional banks, 6 online banks and 3 neo-banks. This report is incorporated within theframework of the 2nd pillar of the D-Rating ratings “Client experience” which final resultwill be presented in the next publication.
New standards of mobile banking user experience
Mobile applications still remain centered on a simple use: checking the balance and transferringmoney. However, by offering a strongly improved digital experience, particularly on those mainareas, neo-banks redefine new standards of mobile banking user experience.
Opening a banking account: the first steps of the user experience… rarely fully digital.
While neo-banks make it possible to open a bank account in a few minutes (directly on the mobile application for N26, by buying a box in Carrefour stores for C-Zam, or in an authorized tobacco stores for Compte Nickel), none of the other French banks are able to open and give access to a bank account within less than 48 hours without going to a bank agency. In most cases, it is a long process that begins online and will take between 3 and 15 days.
From 21 banks analyzed, only 5 offered to open an account through the mobile application: Crédit Agricole, Hello Bank!, Monabanq, N26 and C-Zam (after buying a box in store). Boursorama and Fortuneo have made a hybrid choice, encapsulate their web pages in their application.
The mobile application allows to input personal data, e-signature, take a photo and/or uploaddocuments. N26 also allows immediate Video conference with an employee to proceed toidentity check.
But subscribing through a mobile app is not a guarantee of swiftness: confirmation and activation of the account are only instantaneous for N26 and C-Zam. In other cases, a transfer from another bank account owned by the clients is mandatory (Monabanq allows to complete this process while staying on the application and purchasing by credit card) as is a back-office check of the documents (up to 8 documents for some banks). That consecutively slows down theprocess. In the best case, the application validation is confirmed the day after and the log in access is sent by post.
Consulting the bank account: nothing but a « real time » experience and a Touch-ID access !
The real-time experience, which is imperative for digital client experience, remains unreachablefor many historical actors, which are trapped in the issue of modernizing their technologicalstructure, built around old core systems of 80’s/90’s.
Neo-banks, which have a modern structure free from all legacy issues, are all able to give a real-time service: display for real time balance and transactions, real time transaction notifications,surpassing the threshold. All these parameters can be controlled by the user.
Touch-ID allows a client to log into his account using his digital fingerprint without entering anypassword. Very quickly this becomes indispensable for the digital client experience.
Manage the money: classification of expenses, external accounts aggregator and bot-advisor for the near future.
Online banks were the first to offer a Personal Finance Management (PFM). Today, many banksare offering an expenses classification which is a fundamental part of a PFM.
It was also two online banks, Boursorama and Fortuneo that first offered to add an accounts aggregator (i.e. having a complete view on all accounts held by the client, including those from other banks) to their classification of expenses. Aware of the threat that this poses, one third of the traditional banks now also offer an external accounts aggregator. Some of them have developed that service with the startup Linxo.
At the moment absent in France, bot-advisors will rapidly become an important component of the digital client experience. Last year the first steps were taken in this area: the Scottish Bank RBS launched “Luvo” its bot-advisor based on IBM AI Watson, whereas Swedish bank SEB is using Amelia, IPsoft AI. Orange Bank has announced that a bot-advisor based on Watson will directly deal with its clients’ issues
Money Transfer: The ability to immediately add a new recipient as well as transfer money by SMS are essential.
A simple transfer experience can be very different from one bank to another. Like opening an account, this is one of the journeys that was analyzed by D-Rating. One of the most obvious differences between experiences in different banks, is the ease to add a new recipient. Two third of the traditional banks do not offer that service on mobile yet. Most of them ask for a 48 hours recipient validation timeframe and only some allow to transfer directly to the new recipient.
Today, Compte Nickel, Hello Bank!, N26 and Société Générale are the only ones to offer money transfer by SMS which is a function that allows to directly select a recipient in the phone contact list. Transfer is then instant if the recipient is a bank client.
Controlling the bank card: card activation/deactivation and pin code choice, neo-bank client’s privilege
Who has never felt the anxiety to have lost their credit card, often followed by an emergency call? Few moments later, as a relief, the credit card has been found… but no longer useful. Deactivating a credit card temporally through a smartphone is now feasible: all the neo-banks authorize it. In certain cases, options like activating/deactivating online purchases, cash withdrawals or foreign expenses are also offered.
Traditional banks and online banks offer an experience which is in the best case scenario limitedto modifications and contactless payment activation/deactivations.
It is worth mentioning that N26 added a new feature: personalized modificationof the bank card code. Orange Bank has promised to do the same.
Mobile payments: the emergence of two standard methods which compete against the credit card.
In France, contactless mobile payment is not widespread yet. Its usage[5] remains very limited (6%) in comparison with the European average (15%) or that of Japan, which is the leader in this aspect (49%).
First being proposed only by the telecom industry (in France, Orange launched Orange Cash in 2015), today mobile payments are offered to the clients with the following methods:
ApplePay for iOS devices, launched in France in July 2016
PayLib, a historical actor specialized in the online payments, which at the beginning of theyear has launched a contactless payment system for Android devices
Only BPCE group banks (Caisse d’Epargne and Banque Populaire) are offeringboth services.
Conclusion
Orange Bank arrival this summer will increase the pressure put by the neo-banks on the traditional banks. Even if their product and services offer is rich, and the digital web experience closer to that of the online banks, the gap between the new standards of the mobile client experience is still widening.
Comparison between Orange Bank’s promised services and the existing mobile banking offer
Sources:
[1] App Annie report, Sept 2016
[2] ComScore report, Oct 2016
[3] CCM benchmark, 2016
[4] ComScore report, Oct 2016
[5] Global Mobile Consumer Survey, Deloitte
