Banking in the ‘era of the digital reflex’

By James Harvey, EMEA CTO, Cisco AppDynamics

3 March 2020

In 2007, when the first-generation iPhone was initially released, only a quarter of the European population banked online. Since then, our relationship with technology and applications throughout all aspects of our lives has rapidly evolved. 

Fast-forward to 2020 and the use of mobile applications and digital services in banking has exploded. Today, 85 percent of global consumers use a finance-related mobile app as part of their daily activities with 43 percent saying it is critical to their everyday life, second only to use of social media (according to AppDynamics’ App Attention Index Report 2019)

We live in the era of the digital reflex where the use of applications and digital services such as websites and wearables has evolved to become an unconscious extension of human behaviour. The pace of change in the retail banking sector over the last six years has been staggering. But are banks doing enough to ensure that their applications and IT infrastructure are equipped to deliver against the needs of increasingly demanding consumers?

App loyalty is brand loyalty 

The last decade saw a phenomenal shift in the services retail banks provide to customers. Traditional banks clashed with their challenger rivals and new digital and mobile-only start-ups grew in popularity, further disrupting the market. Monzo, Revolut and Starling have grown to over 5.5 million users combined in the UK in less than five years. 

The rise of applications as a way of engaging, acquiring, marketing and transacting with consumers has accelerated beyond any expectations and this change now sees banks having to keep pace with both consumer demands and pressure from the competition. With the rise of applications and digital services in consumer banking, consumers expect those services to be available 24/7 and to be able to access account information and key services at the blink of an eye. Many banks have invested heavily in the development and roll-out of these applications, but the real pressure comes in managing the digital experience, because today, customers won’t forgive poor digital and application performance. 

For the first time, application loyalty is the new brand loyalty, and the modern-day application is the foundation of successful customer experience. The AppDynamics App Attention Index Report found that 54 percent of UK consumers would change their bank if its mobile app wasn't up to scratch. And 64 percent say they would actively try to discourage others from using a service or brand if they have a bad digital experience - the impact of a bad experience is rarely limited to one person.

Banking on the quest for a flawless digital experience 

To earn and retain consumers’ trust and loyalty, banks and financial services organisations need to ensure a superior, flawless and smooth digital customer experience. 

Many businesses are already investing heavily in digital innovation to drive customer loyalty and revenue, but failure to monitor the performance of those applications and digital services puts them at significant risk of unhappy customers. The good news is that there are simple steps that brands can take to meet these challenges and in turn, exceed the increasing digital customer experience expectations:

  1. Focus on application performance - implementing a robust application performance management solution enables organisations to safeguard the performance of mission-critical applications and user experience in production.
  2. Align performance to business outcomes - measuring and analysing the performance of applications and correlating this to business performance ensures that digital services are always aligned to business objectives, such as customer experience and revenue.
  3. Make decisions and take action based on factual insight - delivering exemplary digital experiences requires real-time monitoring of the full technology stack, from the customer’s device to the back-end application and the underlying network. 

Consumer trust and loyalty can make or break your organisation

According to the App Attention Index, 61 percent of UK consumers choose their bank based on the ability to perform all required transactions digitally, without going to a branch or using the phone. With Open Banking it’s never been easier to switch providers and for banks to lose their customers to a rival. 

From traditional stalwarts of the UK banking sector, to challengers or new mobile-only disruptors, the threat is the same. There has been a seismic shift in the way consumers interact and engage with digital services and applications. The application is no longer just a transactional mechanism, it is vital for customer acquisition, loyalty and retention, it plays a fundamental role in the brand experience reputation of an organisation. In 2020 it will be business-critical to invest in technology that provides visibility and control over these digital services and applications. 

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