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The curious case of ‘Online Banking’

October 16, 2019 - Jayanth Jagadeesh Product Marketing, Infosys Finacle


Are mobile apps making online banking obsolete? Statistics paint a different narrative.

Today, we live in an extremely connected-world; one in which smartphones are near-ubiquitous, and access-to-internet is considered an essential-service. Almost all digitally-active individuals of the banking-population seem to own and use a smartphone.

So, in this Mobile-First era, should banks persist with ‘Online Banking’ service?
Who really uses it? Why not migrate every account and functionality to the mobile app? What justifies the continued investment in sustaining the Internet/Online Banking platform?

My curiosity drove me to objectively evaluate the trends, statistics and forces influencing the adoption across the Mobile and Online channels. As I delved deeper, a different narrative shaped up.

Over the years, Bank of America (BofA) has championed serval innovative digital-initiatives. In June 2018, BofA launched their chatbot – Erica, and made it available to all their mobile users. In about a years’ time, Erica has become one of the most popular and rapidly adopted chatbot in the Financial Institution (FI) ecosystem. Now theoretically, given the best in class mobile app and chatbot that BofA offers, all of their digi-savvy customers must have migrated entirely to mobile-apps.

At least, that is what we can expect, right?
However, statistics indicate otherwise. As of June 2019, BofA has about 27 million active mobile users and about 10 million ‘online banking’ customers who do not use the mobile-app.

Among BofA customers, adoption of mobile-apps has not meant the abandonment of Online-Banking.

Kindly note that these 10 million are internet-aware and tech-savvy customers and in all probability have and use a smartphone. BofA understands and acknowledges what is happening here. A third of it’s digital-customers have a clear channel preference – Online Banking. It needs to be respected. So, in the near future, BofA plans to extend their award-winning bot, Erica to its ‘Online Banking’ customers as well.

Among the end-customers, the adoption of Mobile-Apps has not come at the cost of abandoning the Online-Banking channel. The lesson for FIs then, to not ignore the online-banking platform in pursuit of mobile-first design/approach.

The relevance and continued-usage on Online-Banking platforms can be explained by the 3 Perspectives (3P) and 3 Advantages (3A) that favor them.

The three perspectives (3P) are,

These considerations are valid realities, and strong use-cases is support of Online Banking platforms.
The three advantages (3A) of Online-Banking over Mobile-Banking platforms,

In short, the Online Banking platforms still has several compelling use-cases and is expected to remain relevant for a long time. The trends indicate that the FIs across the world are leveraging the platform to mine analytics/insights, and personalize their offerings. A new functionality is easily prototyped/tested on the Online Banking platform to asses it popularity and adoption. For example, the calculator-tools (such as interest calculators, Loan/EMI calculators etc) are often found in the Online Banking platform and not in the mobile apps.

The focus of the FIs is to expand the customer base, mine insights about existing customers, upsell them the right product at the right time, and deliver superior transaction experiences.

In summary, I think the Online Banking platforms need to be innovated further. They still have a vital role in meeting the customer requirements and also furthering the banks’ vision.

Jayanth Jagadeesh

Product Marketing, Infosys Finacle

Jayanth is a Product Marketing manager with Infosys Finacle. He is passionate about digital-platforms that facilitates exceptional customer-experiences. He writes about customer engagement, emerging technologies and business of technology. Outside of work, he is a reader, biker and a movie-buff.

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  • Like!! I blog quite often and I genuinely thank you for your information. The article has truly peaked my interest.

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