Gulf between expectation and reality on mobile experiences puts banks at risk of losing customers

The London Olympics. Facebook’s IPO. Obama vs Romney. A decade from now, these will no doubt be some of the events that we’ll look back on as the most significant and memorable of 2012. But, for business, the biggest long-term legacy of 2012 may well turn out to be that it was the year when, at last, mobile commerce made the jump from hype to reality. For the first time, the question now facing many brands is not whether, but how, they should be capitalising on opportunities presented by m-commerce. And brands are having to come to terms with the fact that, for the first time, consumer expectations for mobile functionality and user experience are running well ahead of the services their organisations are actually delivering.

A ‘big bang’ event
At Foolproof we believe that what’s happening with mobile devices and the mobile internet is every bit as profound as the web revolution of the late 1990’s. We see it as a ‘big bang’ event: mobile is creating new time and space for consumers. Time that was previously unproductive or inert is now filled with mobile interaction. What are users doing with this time? What brands are they engaging with in this new, very intimate, digital space? Which tools and services create value for them…and which are just creating noise? Knowing the answers to these questions can be the difference between success and failure in the design of digital services.

Right now, the mobile marketplace is still forming. This represents an opportunity for companies to design services to win a share in this new, digital environment and protect competitive advantage for years to come.

In order to help our clients better understand the needs and demands of the mobile consumer, Foolproof recently undertook a major research study – Going Mobile. This rich body of insights was collated over a five-month period and included interviews with brands, a two-week diary study with respondents, and quantitative validation with 500 smart phone users.

One chance to make a first impression
Going Mobile found that today’s consumer views the quality of their mobile interactions with brands as being an important indication of the overall quality of that brand. Respondents said an unsatisfactory mobile experience engendered feelings of mistrust in a business and, in nearly 50% of cases, mobile users stated that they had already ceased dealing with a brand as a direct result of the mobile service or ‘app’ being below par.

When asked to choose words to describe a company which designs or offers a poor mobile app or service, 38.2% stated ‘unprofessional’, 35.8% ‘poorly-managed’, and 35.2% ‘out of touch with their customers’. On the flip-side, organisations delivering a ‘great’ mobile service or app tend to benefit from very positive brand associations. Initial impact is all-important in mobile, with 80.6% of people stating that a mobile service or app has to make a strong first impression if they are to continue using it.

An emotional bond
Going Mobile highlighted the fact that, unlike their other devices, consumers have a strong sense that their smartphone is ‘alive’ and an extension of their own body and personality. There is very real affection and an emotional bond between some users and their phone. Despite the phone being an essential, everyday tool, there’s still a sense of excitement and expectation about how services will develop – and how these will change the users’ lives still further. For many, their phone and tablet offer a sense of freedom and renewed control over their life:

• Consumers describe feeling closer to, and more personally involved with brands which create valued mobile apps and services.
• Unused and unloved apps don’t routinely get deleted, but persist as a reminder of a failed promise by the brand that created them.
• Consumers are already showing sophisticated shopping behaviours that weave usage of phones, tablets and desktop PCs into the purchase decision process. This includes the merging of the physical and digital worlds in the shopping journey.
• There’s a security paradox: consumers have a heightened sense of security and privacy risks, but avoid using services which have complicated or difficult security processes.

Banking on mobile
With retail banking being one of Foolproof’s specialist sectors – we work with some of the world’s leading banking brands – we were keen to drill further into the detail to help our clients understand some of the particular challenges facing them. Mobile devices are redefining how we organise and use our time, and essential tasks like banking are now being made easier as the digital and physical worlds converge in the form of smartphones. It is clear from Going Mobile that the growth of mobile technologies is already changing the way consumers interact with their banks, therefore presenting new challenges to the industry:

– 58.3% of respondents say that mobile devices have given them more control of their money and that they check their finances more regularly.

– One in three respondents say that they look into new financial products and services more since they started using mobile banking.

– Personal banking is viewed as a very important part of overall mobile usage. Users are fully engaging with mobile platforms not only to keep up-to-date with balances and transactions (78.8% of respondents), but also to manage and initiate payments from mobile devices (64.4% of respondents).

Mobile is creating valuable opportunities for banking brands to engage with consumers in new ways, at new times, and in new places. However, banks have struggled to fill these new spaces in consumers’ lives and the need for innovation in mobile product and service design has become a strategic issue for protecting and growing market share.

Will banks look back on 2012 as the year when, like their customers, they made the big leap forward on mobile?  Or will it turn out to be the year when they fell behind the rest of the field and consigned themselves to be forever playing catch-up?

By Caroline Ahmed, Head of Practice & Insight at Foolproof, Europe’s biggest specialist experience design agency.