Gauging the Value of Digital Banking Features

Developing digital banking features that people actually need is no easy feat. Without clear signals from customers and members, financial institutions might run into the danger of creating the modern-day equivalent of a 7-in-1 printer – technically and mechanically impressive, but overwhelming to the user.

Product development teams are tasked with the difficult balancing act of building digital banking features that are innovative, relevant to the product, and useful for the current audience. At the end of the day, financial insitutitions must be informed by what customers and members say they want and what they actually find useful. 

Otherwise, introducing feature clutter and unnecessary – and perhaps even burdensome – functionality can detract from user experience and cause people to look elsewhere for their digital banking needs.

3 Under-Utilized Digital Banking Features

Let's take a look at three types of digital banking features to see where they landed with users:

Advanced Card Controls

Of the lesser-known and minimally used features, advanced card controls such as spending limits, merchant notifications, and spending threshold alerts come to mind. Seemingly developed simply because the technology exists to support them, these features haven’t gained traction among users. In fact, Mastercard recently shared with Narmi that they see close to zero user requests for location-based limits, merchant-based limits, and a mere 0.02% requests for setting up a cap on spending transaction amounts.

Other than being a way to differentiate from the competition, these features are of little use to the average users. Conversely, card control features such as card lock and transaction alerts were rolled out to directly address customer concerns. Having the ability to instantly block a lost or stolen debit card is crucial for users in a tough situation. 

The justification for card locking and transaction alert functionality is also grounded in policy combating fraud – developed in conjunction with the Obama administration's Cybersecurity National Action Plan (CNAP). As part of that initiative, these features were designed to help people have greater agency over their digital lives.

Digital Wallet Features

When digital wallets were rolled out, the idea of storing one's cards and payment information in a single, digital platform seemed like a must-have. However, there wasn't as much adoption of this new technology following the hype. Among consumers who did adopt digital wallets, there was a decline in usage – from an average of 3.7 purchases per user a month in 2013, down to 3 monthly purchases in 2015.

Fast forward to the COVID-19 economy, the way we interact with our smart devices and make purchases is much different. In 2020 usage of digital wallets was up 23% due to a spike in online shopping and safety concerns. In the U.S. alone, digital wallets made up 29.8% of e-commerce transactions, and an increase from 23.7% in 2019. On a global level, it's projected that digital wallets would make up 51.7% of e-commerce transactions by 2024.

Other digital wallet features that have gained popularity are features enabling contactless checkout, such as tap-and-pay cards, and the ability to drop the card signature requirement at checkout. Several major card issuers made this available back in 2018. But due to the pandemic and desire to limit interactions with payment screens, touchless features have grown in importance and value. 

Shifts in the economy, sociopolitical forces, or consumer behavior all have the ability to impact the adoption of new technology. It's important to stay aware of these shifts, and to not only work within the current context of what users need and expect, but also within the larger picture of what's going on in the world.

Budgeting and Spending Tools

Creating tools that make it easy and seamless for people to view their spending history, account balances, and transactions is an essential part of personal financial management. Having a better understanding of where and how you spend is a powerful way to transform your financial story into a positive, impactful one. It’s for these reasons that nearly every Challenger Bank has integrated some degree of budgeting and tracking into their digital offerings.

Assuming the role of financial advisor through features offered can be powerful. When Bank of America released its Better Money Habits Spending & Budgeting tools in 2016, over the course of a year it reported that 1 in 4 of BoA customers bumped up their savings by 20% or more, 1 out of 3 increased their checking account balance by at least 20%, and for 1 out of 7 account holders, their credit card balance dropped by 20% or more.

And when Community First Credit Union rolled out its Save My Change program in 2018, a roundup savings feature linked to debit card transitions, it saw a decrease in the frequency of overdrafts among customers

Despite the usefulness of budgeting and tracking tools, consumers regularly rank other digital and mobile features higher in terms of value and usefulness. In a recent survey conducted by S&P Global Market Intelligence, only about 10% of respondents chose budgeting and personal finance management tools when asked to rank the mobile banking app features they value the most. However, with an improved user experience and better integration into the online and mobile banking platform, a much higher adoption rate is possible – as we've seen with Narmi's personal finance management tools that have close to 80% adoption with users.

Increase Feature Adoption by Improving User Experience

For customers to make the most of the digital banking features available to them, driving adoption is essential. How? For one, banks and credit unions can improve the user experience of these features and make accessing, navigating, and using these tools as simple as possible. Additionally, people need to understand why they should use digital banking features they may not be familiar with. 

In the case of budgeting and tracking tools, improving the user’s experience can directly impact their ability to change their financial story. Beautiful, easy to understand visualization can help people see their finances in a new light. Offering actionable insights based on a person’s transaction and deposit trends takes the usefulness of the feature up a notch, and highlights the real-life impact personal finance management tools can have.



Gauging the Value of Digital Banking Features

Developing digital banking features that people actually need is no easy feat. Without clear signals from customers and members, financial institutions might run into the danger of creating the modern-day equivalent of a 7-in-1 printer – technically and mechanically impressive, but overwhelming to the user.

Product development teams are tasked with the difficult balancing act of building digital banking features that are innovative, relevant to the product, and useful for the current audience. At the end of the day, financial insitutitions must be informed by what customers and members say they want and what they actually find useful. 

Otherwise, introducing feature clutter and unnecessary – and perhaps even burdensome – functionality can detract from user experience and cause people to look elsewhere for their digital banking needs.

3 Under-Utilized Digital Banking Features

Let's take a look at three types of digital banking features to see where they landed with users:

Advanced Card Controls

Of the lesser-known and minimally used features, advanced card controls such as spending limits, merchant notifications, and spending threshold alerts come to mind. Seemingly developed simply because the technology exists to support them, these features haven’t gained traction among users. In fact, Mastercard recently shared with Narmi that they see close to zero user requests for location-based limits, merchant-based limits, and a mere 0.02% requests for setting up a cap on spending transaction amounts.

Other than being a way to differentiate from the competition, these features are of little use to the average users. Conversely, card control features such as card lock and transaction alerts were rolled out to directly address customer concerns. Having the ability to instantly block a lost or stolen debit card is crucial for users in a tough situation. 

The justification for card locking and transaction alert functionality is also grounded in policy combating fraud – developed in conjunction with the Obama administration's Cybersecurity National Action Plan (CNAP). As part of that initiative, these features were designed to help people have greater agency over their digital lives.

Digital Wallet Features

When digital wallets were rolled out, the idea of storing one's cards and payment information in a single, digital platform seemed like a must-have. However, there wasn't as much adoption of this new technology following the hype. Among consumers who did adopt digital wallets, there was a decline in usage – from an average of 3.7 purchases per user a month in 2013, down to 3 monthly purchases in 2015.

Fast forward to the COVID-19 economy, the way we interact with our smart devices and make purchases is much different. In 2020 usage of digital wallets was up 23% due to a spike in online shopping and safety concerns. In the U.S. alone, digital wallets made up 29.8% of e-commerce transactions, and an increase from 23.7% in 2019. On a global level, it's projected that digital wallets would make up 51.7% of e-commerce transactions by 2024.

Other digital wallet features that have gained popularity are features enabling contactless checkout, such as tap-and-pay cards, and the ability to drop the card signature requirement at checkout. Several major card issuers made this available back in 2018. But due to the pandemic and desire to limit interactions with payment screens, touchless features have grown in importance and value. 

Shifts in the economy, sociopolitical forces, or consumer behavior all have the ability to impact the adoption of new technology. It's important to stay aware of these shifts, and to not only work within the current context of what users need and expect, but also within the larger picture of what's going on in the world.

Budgeting and Spending Tools

Creating tools that make it easy and seamless for people to view their spending history, account balances, and transactions is an essential part of personal financial management. Having a better understanding of where and how you spend is a powerful way to transform your financial story into a positive, impactful one. It’s for these reasons that nearly every Challenger Bank has integrated some degree of budgeting and tracking into their digital offerings.

Assuming the role of financial advisor through features offered can be powerful. When Bank of America released its Better Money Habits Spending & Budgeting tools in 2016, over the course of a year it reported that 1 in 4 of BoA customers bumped up their savings by 20% or more, 1 out of 3 increased their checking account balance by at least 20%, and for 1 out of 7 account holders, their credit card balance dropped by 20% or more.

And when Community First Credit Union rolled out its Save My Change program in 2018, a roundup savings feature linked to debit card transitions, it saw a decrease in the frequency of overdrafts among customers

Despite the usefulness of budgeting and tracking tools, consumers regularly rank other digital and mobile features higher in terms of value and usefulness. In a recent survey conducted by S&P Global Market Intelligence, only about 10% of respondents chose budgeting and personal finance management tools when asked to rank the mobile banking app features they value the most. However, with an improved user experience and better integration into the online and mobile banking platform, a much higher adoption rate is possible – as we've seen with Narmi's personal finance management tools that have close to 80% adoption with users.

Increase Feature Adoption by Improving User Experience

For customers to make the most of the digital banking features available to them, driving adoption is essential. How? For one, banks and credit unions can improve the user experience of these features and make accessing, navigating, and using these tools as simple as possible. Additionally, people need to understand why they should use digital banking features they may not be familiar with. 

In the case of budgeting and tracking tools, improving the user’s experience can directly impact their ability to change their financial story. Beautiful, easy to understand visualization can help people see their finances in a new light. Offering actionable insights based on a person’s transaction and deposit trends takes the usefulness of the feature up a notch, and highlights the real-life impact personal finance management tools can have.