Complexity Is Turning Off Mobile App Consumers, Study Finds

Feature overload is straining the relationships many mobile banking users have with their financial institutions, according to new research from J.D. Power.

The consumer analytics firm, which surveyed 17,424 retail bank and credit card customers nationwide in March and April, found that member satisfaction scores for mobile banking apps fell as the complexity of the apps’ features increased. The study measured satisfaction with apps’ ease of navigation, appearance, clarity of information, range of services and availability of key information.

“The overall customer satisfaction score for retail banking mobile apps is 853 (on a 1,000-point scale), down 15 points from 2018. Overall satisfaction for online banking also is 853. In both cases, customers were challenged in completely understanding all features. Complete customer understanding of the mobile app is associated with a 130-point improvement in overall satisfaction for banking apps and a 122-point improvement for online banking,” the study said.

For many financial institutions, the findings apply to a wide swath of their members. About 84% of retail bank customers said they had at least one digital interaction with their financial institutions in the past three months, according to the study, and 71% of credit card customers said they had used their provider’s digital offerings.

“Leading U.S. banks now have more than half of their customers interacting with them in a digitally centric manner,” J.D. Power VP of Financial Services Intelligence Bob Neuhaus said. “The trend is most pronounced among the largest national banks, such as Bank of America, which now counts 54% of its customers as digitally centric, meaning they do the bulk of their banking without setting foot in a branch. As the number of banking and credit card customers interacting with their providers’ digital channels continues to grow, these digital experiences will become an increasingly fundamental part of the overall brand. It is critical that banks and credit cards get the formula right, delivering the resources customers need while also designing apps to be user-friendly.”

Regional and mid-size financial institutions may be at a disadvantage, however, Neuhaus added.

“Where large banks have half or more of their customers being digitally centric, regional and mid-size banks have a third or less of their customer base relying primarily on digital channels,” he said. “This gives large banks both a cost advantage through reduced branch traffic and a growing satisfaction advantage as customers engage with expanding digital functionality.”

The study also found that once members become power users of their mobile banking apps, their loyalty to the financial institution increases.

In particular, members accessing their financial institution’s mobile banking functions at least eight times a month on a mobile or online platform had substantially higher overall satisfaction, according to J.D. Power. Overall, 69% of bank mobile app users said their FI’s mobile app was either a “somewhat important” or “very important” factor preventing them from moving to another financial institution.

“The bulk of spending and design activity in the banking and credit card online and mobile app space has been focused on creating rich feature sets and improving usability. As the technologies evolve, the focus needs to shift to personalization, creating a curated user experience that delivers both convenience and streamlined usability,” the company noted.