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Segment-Based Strategies for Mobile Banking by Cognizant Business Consulting

20 August 2013
 

To maximize their investments in mobile banking, retail banks should first understand the unique requirements of five key consumer segments – each with their own levels of maturity and comfort – then create a strategic plan that delivers on near-term customer acquisition and retention while driving innovation in today’s rapidly changing digital channels.

Mobile devices, including smartphones and tablets, have transformed the world in which we live. As digital channels evolve, the move to mobility continues to provide a faster and more convenient way for consumers to interact with their financial services providers. Retail banking is no exception. Retail banks have universally accepted mobile banking as a mainstream banking channel rather than just an optional “add-on” service. However, to fully realize its potential, banks need to understand consumer preferences regarding desired features and overcome barriers to wider adoption.

Most retail banks have evolved their mobile strategies and, by extension, their customers’ mobile journey through a “one-size-fits-all” approach focusing on features and offerings. Given the rapid evolution of mobile technology and its impact on banking, we conducted a study of mobile banking by surveying customers across a wide array of retail banks, age groups and income categories. The objective was to understand emerging trends, as well as current and future needs, in order to help retail banks increase the adoption of mobile banking services. Not surprisingly, our research reveals that consumer expectations of mobile banking vary across age and income groups.

Just as retail banks segment consumers to improve their product cross-selling and customer-acquisition efforts, they can now apply similar tactics to their mobile strategies. This has major implications for banks in terms of where to invest scarce development and financial resources. Retail banks must also consider which consumer segments they wish to appeal to through their mobile offerings in order to optimize customer retention and acquisition, and advance service adoption. This represents an opportunity for retail banks to continue to invest strategically in mobile technologies and at the same time drive market differentiation.

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