Mobile banking apps fall short of consumer expectations, with many customers believing a banking application could have helped them avoid a financial problem, according to a survey by Varolii Corp.

The company polled more than 600 consumer adults across the United States about mobile banking applications. It revealed a surprising disparity in what consumers want in a mobile banking app and what they actually get from their banking institution. Americans increasingly want, and expect, to be able to conduct more advanced functions like depositing checks and receiving real-time notifications on account activity from their mobile banking apps.

"There's an app for everything in today's mobile-driven consumer environment. And, as the economy has suffered over the past few years, consumers are turning to apps for financial management as well," says Brian Moore, financial services market manager for Varolii. "However, our study shows that most banks are failing to deliver on consumer expectations with first or second generation mobile applications."

Nearly two in three consumers believe it's their bank's responsibility to immediately alert them when they have a low balance or insufficient funds to pay a bill. In fact, nearly 70% of consumers believe that a banking application could have helped them avoid a financial problem in the past such as a costly and embarrassing overdraft or bounced check.

Yet, 68% have never been notified of a low balance or reminder to pay a bill. And, the younger consumers are, the more strongly they believe in the importance of banks being proactive-73% of 18-to-24-year-olds believe they should receive notifications from their banks versus 56% of those over 55 years old. The survey also identified other key capabilities that consumers want for a superior customer experience such as notification of irregular account activity or notice of a low balance.

"The modern digital consumer clearly sees value in banking apps. Banking institutions have an opportunity to create third generation mobile applications that can enable a more proactive role in their customers' finances," says Moore.

Not only do consumers want to be contacted but many want to be reached on a combination of digital channels. According to the research, consumers want to receive these notifications and reminders by email (47%), text message (22%), and through their smartphone application (13%).

"Mobile banking applications are on the rise and an ever-growing base of young consumers are using them and expecting more advanced capabilities," says David McCann, CEO at Varolii. "As a leading customer interaction management provider, we are uniquely positioned to help banks ‘interaction-enable' their mobile applications to provide the proactive notices that consumers require. We believe that most institutions are operating on second generation applications. Today, institutions need to upgrade to the next level by embedding more proactive, rules-based outreach into their application code. It is also important to realize that smartphone apps are just one more channel that has to be orchestrated into a holistic customer experience across voice, text, email, and mobile devices."

Varolii Software-as-a-Service financial services applications generate more than 100 million customer interactions per year. More than 70 financial services institutions rely on the Varolii Interact Platform to reach consumers with real-time notifications across banking, insurance, mortgage and credit services such as credit fraud alerts, mortgage loan process updates and retail banking activities.

[This article was posted on February 20, 2013, on the website of ABA Banking Journal, www.ababj.com.]

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