June 30, 2015

Proactive push notifications—the future of banking

Sami Uski

Head of Business Development, Banking, Tieto

What if mobile banking apps alerted you to new opportunities and potential financial problems in real-time, and reacting to these matters was just one swipe away? Our collaborative study shows that today's digital users are ready to receive real-time push notifications that help them manage their finances. Providing personalised digital services proactively is the future of personal banking.

Proactive push notification from a bank - Tieto

Can mobile banking apps be more like social networks? This was one of the key questions raised by consumers when we asked them to test user new mobile financial services prototypes. Our study focused on user perception and usability was carried out as part of an ongoing research program funded by DIGILE together with Nordic bank Nordea, Nokia and two leading research institutes, VTT and Aalto University.

The study revealed a clear signal: today's mobile users desire apps that deliver proactive banking. In practise this means personalised, real-time guidance that provides a clear understanding of their finances. Instead of signing into a website or app and seeking information themselves, users prefer relevant information to be delivered as a feed or a notification alert from their mobile banking app—just like they receive from social networking apps:

It is two weeks until you receive your next payment—
would you like to adjust your daily budget?

Your bill due date is approaching—
can you pay now or would you like to postpone payment?

Are you at a house showing?
Swipe right to apply for a mortage suitable for this apartment.

Although banks administer a wealth of valuable customer data—from what we own to what we buy—this data has not yet been used to improve our mobile finance services. At present, most mobile apps are limited to showing current account balances, transactions and bills, which is merely reactive banking.

For banks, apps present a great opportunity to alert customers to potential financial problems, reach them with personal offers on financial products suitable to the customer's situation and help users manage their finances by avoiding expensive overdrafts or by warning them of deadlines.

Mobile bank push notifications in two test-cases: Nordea & Lindorff

When developing third-generation proactive mobile apps, it is essential that notifications do not merely provide plain information but also directly connect users to relevant functionalities in the mobile app. In the study, we put a special focus on exploring these so-called 'rich' push notifications.

Since moving past the study and prototype phase, we have implemented push notifications in the mobile apps offered by our clients to their customers. The initial results from customer solutions have been remarkably positive:

  • In one example, Nordea Bank offered users an instant renewal of a fixed-period account upon maturity through a notification. When users were proactively notified, the rate of product renewals tripled via digital channels.
  • Debt collection company Lindorff gave their debtors the option of paying their active bills immediately or establishing a new due date. When given the opportunity to choose a new due date with just one click, the majority of users opted to do so. This app is currently in production.

An interesting outcome of these tests is that users are even willing to pay for proactive mobile banking app services when they are offered in the right situations.

When do users want push notifications from their banks?

It is important to determine the appropriate times to reach out to customers through a mobile app. By providing users with only useful information, proactive banking can avoid becoming bothersome banking.

Our study showed that users are receptive to being messaged by their banks under the following circumstances:

  • When the messages provide real value
  • When users are proactively motivated or guided with a relevant call-to-action
  • When the app makes it is easy to act on the information promptly
  • When the user feels that the app is trustworthy, which can be significantly influenced by a secure user experience

In the future, anticipating the needs of the contemporary mobile consumers will be fundamental to offering the right products and personalised guidance at the right times. Obviously, this is an area with a ton of opportunity for banks. But they must act fast—before their competitors innovate first.

Read more about Tieto Financial services

Customer Experience Management for Financial Services

Download our study which investigates CEM within the Finance Industry in the Nordic region, with emphasis on the generic CEM maturity and development actions on digital CEM. 98 Finnish, Swedish and Norwegian decision makers within Finance were interviewed in this quantitative study.

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