Money movement is arguably the most essential function of a financial institution. However, now that there are more ways to move funds than ever before, many institutions’ mobile banking apps aren’t quite the centralized solutions customers have come to expect.
In Money Movement Hubs: Boosting the Value of FIs’ Most Commoditized Features, Gregory Magana, Digital Banking Analyst at Javelin Strategy & Research, assessed the apps of six of the largest financial institutions based on navigation, ease of use, rail selection, and next-gen features. The report gives actionable steps financial institutions can take to optimize these indispensable services.
Consolidating for Space and Navigation
One of the key criteria in the navigation category was whether the bank organized its money movement options in one place. This makes it easy for consumers to discover new features and saves financial institutions space in their valuable anchored link positions in the app.
“The strategic goal is to create a central, anchored pay-and-transfer hub rather than placing transfers here, bill pay here, and Zelle here,” Magana said. “That traditional model uses up the navigational bar mostly for money movement. That’s invaluable real estate that a bank can use to highlight value beyond transactional speed.”
All the money movement options should be together in a portal that has an anchored link on the home screen. This makes it as easy as possible for customers to open the app and proceed directly to the money movement features they need.
Additionally, the apps were examined to see if customers could add quick links at the top of their home screen with the money movement options they frequently use. For example, customers who mostly come to the app to pay bills should be able to customize their app to have bill pay front-and-center when they log in.
Although most of the financial institutions supported these navigational features, they lagged in supporting many money movement options. Features like wire transfers, real-time payments through FedNow, and ACH transfers were off the beaten path.
“It’s important to remember that these other money-movement-adjacent type things and newer features, and the more tangential ones that you might want to offer, they should all be consolidated,” Magana said. “But broadly speaking, the navigational aspect of the Fis’ apps was one of the better money movement spots for them.”
Picking a Payment Rail
Although navigation was a strong suit for the banks’ mobile apps, they were not as adept at helping users pick the best payment option. One of the key criteria was if the banks offered customers guidance, especially on aspects like when funds will move.
“First off, do you offer any guidance at all, Mr. FI?” Magana said. “Does it include imprecise language like banking days and business days? Do you hedge by saying, ‘This may leave your account before, on, or after the day that you ask it to?’ We refer to this less than affectionately as the from-here-to-eternity disclaimer—unfortunately, it is too common.”
Though all the financial institutions provided money movement guidance in general terms, many fell short in the finer details.
“Do you describe it with a calendar?’” Magana said. “Can you tell me that this is leaving your account today and it’s going to get there on Friday, or the 14th, or some actual human-language day? That’s a bit of a weaker spot.”
Another area of opportunity for FIs lies in providing advanced guidance to customers on the best way to route a payment. For example, if the customer knows who they want to pay, how much, and when, they could consult a comparison grid to make the best choice.
Only one institution gave their customers a consolidated comparison grid for choosing between payment rails. In a perfect world, financial institutions would go much further than that do-it-yourself process.
“Our holy grail is intelligent payments routing, where I tell you who I want to pay, how much, and when, and you, the FI, just handle it for me,” Magana said. “I don’t have to see how the sausage is made. I just let you know when this needs to get there, and you take care of it as best you can.
“That’s still out there. That’s going to take a while, and it’s not necessarily the most important feature for power users who have standard payments routines. But it’s the white stag for customers who don’t have established routines and don’t necessarily know which option is the best for sending money, especially where it needs to be as fast as possible.”
Handling the Math
When it comes to ease of use, one of the most essential features is to help customers get a better handle on where their balance stands. This is especially true with recurring payments.
Although all the mobile apps in the study displayed the current account balance on each money movement screen, they were lacking when it comes to giving customers a consolidated view of their money movement activities. This would be a single window that shows upcoming Zelle payments, bill payments, and any other scheduled transfers.
Even less common were features that proactively kept customers informed.
“Are you going to go a step further, rather than just show me that I’ve got $500 coming out of my account in the next two weeks?” Magana said. “Can you say, ‘We’ll handle all the math for you based on what you’ve got coming out. Your balance is going to be down to $500 because you’ve got $600 coming out and you’ve got $1100 as an available balance.’
“There’s very little support for that one right now. Just make it easy-to-use money movement. Don’t make me whip out a calculator and figure this stuff out.”
Next-Gen Money Movement
Some next-generation features have already been integrated into many of the FIs’ apps. One of these aspects is cross-selling peer-to-peer (P2P) payments as a mechanism to pay small businesses.
“If you’ve got a plumber at your house and he works on his own and he’s not part of some big plumbing conglomerate—if there is such a thing—it would probably be beneficial for both you guys if you could just pay by Zelle,” Magana said. “If you do that, you don’t have to worry about paper checks; it transfers automatically. The funds leave your account and hit the target account so fast that it probably happens before he’s even gotten back in the truck.”
Most of the top banks have begun to include bill pay and Zelle in the same window, and some will even suggest Zelle as a payment option if the customer is paying an individual. However, one area where banks can improve their P2P offering is by allowing Zelle users to create groups within the platform so they can split payments.
“This is something that Venmo offers, and PayPal added it late last year,” Magana said. “Make it so I can create my Roommates group, so we can split the utility bill or the dinner bill or the groceries every month. Why does this have to be a pain? Don’t make me do the math, and then we all have to send money back and forth.”
While this area is lacking, one key aspect where financial institutions have improved is in instantly verifying external banking accounts. Most of the larger banks have moved beyond the days when they would send two small deposits to the other account, then the customer would have to verify the amounts.
Though the process of verifying external accounts has improved, it remains rare for financial institutions to offer the capability to authorize external accounts for transfers without extra setup or authentication.
“If you set external accounts up such that you can see their balances and do some of your budgeting with the financial fitness tools that the bank offers, they’re still not available to do transfers until you set them up a second time,” Magana said. “It’s this concept of taking out some of the double-dipping for the customer. Don’t make them set up that account twice.”
Removing this friction is a key step for FIs to take in reaching the end goal for their mobile app: to be the money movement hub for all activities in a customer’s financial life.
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