THE FUTURE OF RETAIL BANKINGFive things you can learn about mobile product excellence from Monzo.

© The App Business1

2© The App Business

Recently at TAB HQ, we have been taking a deep dive into the current climate facing retail banking today in the UK. Our in-depth research resulted in the creation of a Strategic Mobility Framework: six capabilities we believe are crucial to banks as they strive to achieve success amidst rapidly changing market conditions and customer expectations.

In a recent post over on our site, we unpicked one particular capability - product excellence. A piece of lean research and user testing helped us understand how existing retail banking apps from the UK’s Big Six banks were doing against this capability but it also begged an important question: what does ‘good’ look like, when it comes to product excellence in retail banking apps?

To answer that, we turned to the hungry start-ups emerging in this space, and which grab so many headlines. One in particular stood out: Monzo. A mobile-only bank launched in 2015. Monzo was built from the ground up and enjoyed considerable success to date. In fact, Monzo resonated so well with consumers that it set a new world record in crowdfunding - £1 million, in just 96 seconds.

NOTE: At present, Monzo has a restricted banking licence. This means they can only provide a prepaid debit card. However, they will be offering full banking services from January 2017.

3© The App Business

FIVE KEY TAKEAWAYS

4© The App Business

Today, we expect the services that matter to us to be on our own terms - to access them whenever, and wherever we choose. Our expectations in banking are no different. Monzo recognises this, and makes it as easy as possible for customers to complete their everyday banking jobs, during the moment they’re in.

Long gone are the days where we wait for a monthly bank statement to arrive in the post. But even with internet and mobile banking, these processes are still rarely instant. Payments take days to appear in your account, sending money to friends takes a few hours to clear, and if you lose your card, or worse - misplace it - then you’ll be faced with a long wait on phone queues and postal services as you wait for your new card to arrive.

Monzo makes all of this much simpler, and much faster for customers. Transactions appear immediately in the app, payments to friends are instant, and a single tap can freeze and unfreeze your card - super handy if you find it lost down the back of the sofa.

Customers are tired of waiting.

RIGHT: A Monzo card can be frozen or ‘defrosted’ at the click of a button.

TAKEAWAY #1

5© The App Business

The best banking apps may not get opened.

It’s a common misconception that the longer people spend in-app, the more successful that app is. However, the very best apps proactively share information with us: there’s no need to open them at all.

To do something as simple as check your balance, most banking apps today require you to first unlock your phone, open the app and log in.

Monzo, by contrast, doesn’t force people to open their app in order to see simple banking information. On iOS, for instance, checking your balance and daily spend is as simple as swiping right to see a widget. Payments, too, are confirmed by easy-to-understand notifications, as is a change to your pin.

As apps continue to unbundle across new surfaces, interactions and devices, there are many exciting opportunities ahead for banks to help customers across digital touchpoints, from wearables to TV and voice-enabled devices like the Amazon Echo.

RIGHT: Monzo’s widget.

TAKEAWAY #2

6© The App Business

In a recent piece of user testing with over 100 young Londoners, we validated that one of the biggest pain points with UK banking apps is not being able to easily track spending habits.

Monzo allows you to view financial transactions either by month, or by categories like ‘Transport’ or ‘Bills’. This provides a quick, easy to understand overview of spending habits and, ultimately, reduces the cognitive load on the user.

It’s important to note, though, that categorisation is not an exact science. Monzo can currently only tell where you’ve shopped - not the exact items you purchased. Therefore, some purchases occasionally end up in the wrong category.

We expect this to be an area of improvement and opportunity for banks, once they get their hands on Level 3 merchant data (which adds line item data to goods and services purchased).

Banks should do the heavy lifting.

RIGHT: (lefthand device) spending grouped by category; (righthand device) spending mapped against monthly targets.

TAKEAWAY #3

7© The App Business

We have all encountered the many frustrations that can occur when trying to communicate with our banks. From spending hours on the phone, to being forced to visit a retail branch - generally speaking, people don’t like interacting with banks.

Monzo is different. By combining a high performing app with Intercom’s instant customer service chat technology, you can get in touch with Monzo advisors 24/7, in the UK or abroad. The response time can vary, but you will generally get a rely within a few hours. Reducing this wait time, from days to minutes, and serving it up on our most personal device makes customers feel valued, and taken care of.

Considering that Monzo currently has around 60 employees, this customer service level is impressive by anyone’s standards, and we can see this becoming a core feature of many banking apps in the future.

Provide customer service, on demand.

RIGHT: Monzo’s customer service chat screen.

TAKEAWAY #4

© The App Business

Looking after our financial health is little more than ‘life admin’ to most of us. This isn’t helped by the view of retail banks as relatively unfriendly and hard-nosed: a perception that hit an all-time low when the financial crisis hit. Monzo, by contrast, has taken a very different approach.

In the app itself, images and simple, human language inject delight into the user experience: an animation plays whilst you wait for your card to arrive, emojis appear in your notifications and you might even get a ‘Golden Ticket’, enabling you to invite a friend and skip the waiting list.

But more important that this is the clever way Monzo has made banking a talking point, and the company is just as notable for how it communicates and engages with its customers as it is for its app. Using the language start-up style innovation and of user engagement, these techniques may seem to be aimed at a younger target audience - but in fact, we see it as a strategy that succeeds in attracting and maintaining a wider, and highly valuable mobile-enabled customer base.

Banking doesn’t have to be boring

RIGHT: (lefthand device) a notification with an emoji; (righthand device) imagery within the Monzo app.

TAKEAWAY #5

8

9© The App Business

Summary

In this short deck, we have brought product excellence - a key pillar within our Strategic Mobility Framework - to life with a powerful example of what ‘good’ looks like, examining one of the leading new breed competitors reshaping the retail banking landscape today.

It’s tempting to either assume Monzo and other hungry start-ups like them have already locked down the opportunity - but that couldn’t be further from the truth. Take a look at Yolt (www.yolt.com), from ING: currently in Beta, this highly innovative new app marks a return to the UK retail market for an established, incumbent banking organisation. It’s also one of the first European banking apps to provide a single, integrated platform for customers to manage money across all their accounts - including those held by competitors: something that Monzo does not currently offer.

What makes Monzo and Yolt such strong examples of mobile product excellence is their focus on deep customer insight, founded on a clear understanding of the jobs - or desired outcomes - that customers are really trying to achieve when they access their banking information.

© The App Business

To learn more, get in touch

Outcomes, not features, create outsize results.

10© The App Business

— enquiries@theappbusiness.com

+44 203 657 9785

The App Business | The Spirfite Building, 71 Collier Street, London N1 9BE | www.theappbusiness.com