Mobile card services are giving consumers greater control over the debit cards they use every day while creating another opportunity for financial institutions to strengthen customer relationships. As smartphones become increasingly central to banking, consumers expect to manage not only their accounts but also the cards connected to them directly through mobile banking apps.
Features such as transaction alerts, spending controls, low-balance notifications, and the ability to turn a debit card on or off can combine convenience with greater security. For banks and credit unions, these capabilities can make the mobile experience more valuable while helping protect an important connection between the financial institution and its customers.
For most consumers, a debit card is the closest connection they’ll ever have to a financial institution. While they might also have auto loans, a mortgage or an investment account with a bank, the on-demand account tied to their debit card is the one they use day to day — the one they most rely on for safe and convenient payment transactions and the management of personal finances. It’s also the link to a primary FI that is most susceptible to disruption and disintermediation. How would mobile card services affect things?
Bringing Debit Card Controls to Mobile Devices
Mobile card services allow you to store your card information on your phone and make payments using your phone instead of a physical card. This has a number of advantages. First, it’s more secure. If you lose your phone, you can cancel the service and prevent anyone from using your card information. Second, it’s more convenient. You don’t have to worry about carrying around a physical card or remembering your PIN number. And third, it gives you more control over your spending. You can set limits on how much you can spend in a day or week, and you can track your spending more easily.
Mobile Banking Challenges the Traditional FI Relationship
A March 26 webinar hosted by ATM Marketplace and sponsored by Elan Financial Services examined the challenges and opportunities confronting FIs in a mobile world where new banking alternatives seem to appear daily out of thin air, and where the next generation of adult consumers — millennials — are also the first generation in modern times to see a relationship with a brick-and-mortar bank as optional.
Giving Customers Greater Control Over Their Cards
Banking customers are increasingly using – and embracing – new ways to access and manage their banking accounts, particularly with the use of smartphones and other mobile devices. This 24×7, “always on” banking environment fits in nicely with users’ busy lives and lifestyles, particularly with Millenials and tech-savvy customers and members.
These power users are also interested in managing their financial experiences through their mobile apps, including creating spending and low balance alerts and turning their debit card on and off. These capabilities serve to empower banking customers as well as deepen relationships and improve the overall customer experience.
Debit cards occupy a particularly important position in the relationship between consumers and their primary financial institutions. Because customers use them frequently for everyday purchases and account access, the debit card provides banks and credit unions with an ongoing opportunity to remain connected to their customers.
Mobile card services can strengthen that connection by putting useful card management capabilities directly into consumers’ hands. The ability to establish alerts, monitor spending, or temporarily turn a card off gives customers more immediate control over their accounts while also addressing concerns about security and fraud.
These capabilities may become increasingly important as consumers encounter more alternatives to traditional banking relationships. Millennials and other digitally engaged customers may have less attachment to physical branches, making the quality of the mobile experience an important factor in how they interact with their financial institutions.
For banks and credit unions, adding card controls to mobile banking applications can therefore accomplish more than simply providing another convenient feature. Mobile card services can empower customers, enhance security, and make everyday financial management easier. By creating a more useful and engaging mobile experience around the debit card, financial institutions have an opportunity to protect one of their most frequent customer touchpoints while strengthening the overall banking relationship.
Overview by Edward O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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