The speed at which consumers have adopted mobile digital platforms is testimony to how highly they prize the convenience of mobile apps. But just as the advent of supermarkets made shopping easier by bringing different types of grocery produce, clothing, hardware and more under one roof, apps that offer only one type of product and services could be missing a trick.
Take WeChat, China’s ‘super app,’ that lets users do everything from mobile banking to social networking, booking taxis or a doctor’s appointment, find a date, order food and lots more. Since its launch in 2011, its growth has boomed to over 1 billion monthly active users in 2018 and much of this success is due to it integrating different types of digital distribution channels, through third-party application programming interfaces (APIs), into what started as a simple messaging service. This API utilisation is not a fad. In its report, Competing in a World of Sectors Without Borders, McKinsey predicts 30 percent of world revenue will be generated through open API-enabled channels by 2025.
The open banking-open API opportunity
Over the past year, open banking has become a reality and has led to a proliferation of financial services-themed integrations and features being offered as part of mobile banking apps. These are usually smart spending services or interactive charts – Yolt is one of them – but there is a huge and potentially lucrative opportunity just waiting in the wings, namely that the products and services on offer via the mobile channel needn’t be limited to financial products and services alone.
With open APIs, integrating lifestyle products and services into a mobile banking app is now eminently possible. Tinkoff Bank in Russia is an example of an institution that has injected a dose of lifestyle consumerism into its offerings. Its 8 million customers have access to a ‘financial ecosystem’ that offers a full range of lifestyle services, as well as financial ones, via its mobile app and web interface. Users can plan visits, buy tickets or make reservations for concerts, cinemas, restaurants and theatres from within its mobile app, as well as receiving promotional bonuses, all of which is helping to create a positive perception towards what historically has been regarded as dry.
In these examples set by Tinkoff and WeChat, it is the ability for third party businesses to access open APIs that creates the opportunity for banks and FinServs to become more consumer-friendly and provide a more holistic experience that is not limited to finance. From the ability to offer mobile tickets for events and transport to pushing out personalised recommendations and voucher offers that drive loyalty and increase customer satisfaction, banks and FinServs need to start considering how to go about generating additional revenue streams and creating new value by investing in this mobile distribution channel.
Data benefits for banks
Open banking and the opportunity to integrate with third-party open APIs is allowing financial institutions to grow beyond the scope of their traditional offering and participate in other digital marketplaces without having to develop these capabilities themselves. In the case of offering tickets to events and theatre shows, API integration makes it easy to partner with an existing mobile ticketing technology provider. Data is the underlying asset in this equation and over time, a banking app can become a valuable data-driven marketing communications channel for sharing tailored, personalised promotions direct with the mobile account holder.
Personalisation is becoming an ever more important part of the customer experience but it must be done to a depth that makes it worthwhile for the customer. One survey found that being addressed by their first name would only encourage 8 percent of respondents to engage, and when it came to replying to a birthday email, only 7 percent said they would. But with intelligent use of data drawn from mobile app interactions, it’s possible to offer relevant and timely experiences that result in more frequent interactions, the opportunity for up- and cross-selling and ultimately happier, more loyal long-term customers.
Choose your partner
Banks and FinServe companies are traditionally conservative and so opening up to this new opportunity can prove easier said than done. In the UK, we are helped by regulatory push which has extended the deadline for being ready for open API implementation to September 2019.
One way to approach this new world is to look for an experienced third party mobile service provider which uses open APIs and partner with them from the get-go to test integration and perform some marketing trials. Mobile ticketing is already changing the way consumers interact with brands, which are using behavioural data to inform the basis of relevant and timely voucher promotions for anything from a sixth coffee free voucher at a café next to a train station to travel pricing discounts or VIP bonuses at entertainment events. The personalisation that becomes possible from data analysis improves satisfaction levels and customer loyalty.
So, if you’re considering expanding the retail scope of a mobile banking app beyond financial products and services, some good advice would be to partner with an existing mobile ticketing provider. Look for one with proven technology that creates secure tickets by natively generating them from with the mobile operating system, and that has a robust digital platform already in place to perform the data analysis that will ensure your app is always relevant to your customers.
Date: May 23, 2019