The Importance of Smartphones to Financial Services
Apple’s App Store turns 10 in July, but it’s showing no sign of aging. Smartphones are now such a huge part of our daily lives that the average person spends five hours per day on their device. The vast majority of that time is spent interacting with apps that help us do things like order an Uber, split a restaurant check with a friend or check our bank balances.
It may be difficult to imagine people becoming even more caught up in their smartphones, but when it comes to such things as financial services and banking, these devices are becoming even more crucial. “Members of older generations are rapidly adopting smartphones and will start to increasingly rely on them to access more financial services, eCommerce sites and payment options, using their smartphones. Bottom line, there needs to be an ongoing commitment to ensuring the experience of mobile banking continues to improve,” the Financial Brand writes.
New technologies, from 5G connectivity to augmented reality and artificial intelligence will drive the expanding functionality of our smartphones, according to a report by Deloitte Global. This coming “age of invisible innovation,” the report says, will make us even more connected: By the end of 2023, 90% of adults in developed countries will have smartphones, up 5 percentage points from 2018. That growth will primarily be driven by greater use among people aged 55-75, a cohort where penetration will hit 85% in developed countries in 2023, a 10-percentage-point increase over 2018.
Those older smartphone users will increasingly use their devices for such things as in-store payments and personal banking. The report predicts that by 2023 we will interact with our phones on average 65 times daily, up 20% from today. With the use of smartphones becoming even more important, banks should continue investing in their mobile offering to stay up-to-date with the latest technological advances.
A Federal Reserve report, Mobile Banking and Payment Practices of U.S. Financial Institutions, notes that to date, most mobile banking has been centered around basic consumer services like checking bank balances, transferring funds and paying bills. In the next few years, the report says banks will have to offer enhanced features, such as contactless payments and incorporating electronic wallets like Apple Pay. The report recommends that banks develop a comprehensive strategy for mobile banking and mobile payments, improve their marketing and education plans for mobile and strengthen their security and risk management practices. Noting that financial services companies will increasingly interact with third-party companies that can bring value-added services to improve their offerings, the report says banks should conduct due diligence on mobile payment solutions and expand the mobile banking services they offer for businesses.
According to the Financial Brand, “The banking industry should evaluate how best to integrate smartphones into their digital strategies for both consumers and employees. 24 and organizations must move forward quickly to optimize the functionality.”