How open APIs can improve the banking app customer experience

By Ashley Murdoch, CEO Corethree 

The incredible rate at which UK consumers are adopting smartphones is revealed in Deloitte’s recent Global Mobile Consumer Survey, which shows market penetration growing from 52 percent in 2012 to 87 percent in 2018. This increase in uptake reflects how highly users value the convenience of mobile digital platforms and mobile devices’ ability to offer, through apps, so much more than just communications services.

Android is the most used mobile OS in the world, and the average number of Android apps on a smartphone is 35.But why so many? After all, it’s the ability to access services right at your fingertips, at a time and place convenient to you that is important. If only one app could provide access to everything a consumer needs, then why bother downloading multiple apps? In China they have exactly this – an ‘app for everything’ called WeChat. Originally a simple messaging app, as different types of digital distribution channels were integrated through third-party application programming interfaces (APIs), it grew into a super-app that today is used by over one billion users to order food, book a doctor’s appointment, hail a taxi, find a date and much more.

Open banking-open APIs

Over the last few years we have heard a lot about open banking, which is designed to bring more competition and innovation to financial services. Within open banking, open APIs make it possible for financial services-themed integrations and features to be offered as part of mobile banking apps. But why stop there? Mobile, as a direct channel to customers, presents a fantastic opportunity for up- and cross-selling consumer-lifestyle products and services that are integrated into the mobile app.

A great European example is Tinkoff Bank in Russia, which is enabling its 8 million customers to access a wide range of consumer-lifestyle services, in addition to its financial ones, via its mobile app and web interface. From buying theatre tickets to restaurant reservations and more, Tinkoff customers can also receive promotional bonuses and loyalty points, all of which help build the bank’s reputation for being more than a traditional, but limited, financial institution.It’s important to understand that it isn’t Tinkoff that provides the additional lifestyle services. Instead, it is third party businesses that integrate their products into the Tinkoff mobile app using open APIs, resulting in a broader and more consumer-friendly user experience and, crucially, additional revenue streams for the bank.

Data – the underlying asset

When offering products and services, whether they are lifestyle-oriented or financial, knowing the preferences and behaviour choices of the consumer being targeted means that all promotions will be relevant and timely, which significantly improves the chances of frequentand positive customer engagement.The ability to offer tailored,personalised promotions is only possible through the intelligent use and analysis of data drawn from mobile app interactions. It is data that provides the user insights that can transform a single-service banking app into a valuable data-driven marketing communications channel. Imagine a customer checking their bank balance on your app, noticing they have a bit extra than expected and so when a message is received offering a VIP shopping session at their favourite high street store and a discount from the transport company they will need to travel with, it feels as if all this has been put together especially for them – and it has.

Partner up

As the September 2019 deadline for being ready to implement open APIs in the UK approaches, what’s the best strategy for banks that are ready to expand the retail scope of their mobile app beyond financial products to take advantage of the multi-service app opportunity? One approach would be to partner with an experienced and proven third party mobile service provider which already uses open APIs,so you can start off by doing some integration testing and marketing-promotion trials. Even better if your chosen partner already provides mobile services for businesses that you would like to partner with. Mobile ticketing providers for transport operators or events and experience companies are great examples, and are already changing the way consumers interact with brands thanks to robust digital platforms and data analysis that ensure your mobile app promotions are always relevant,and therefore valuable, to your customers.