In nearly every metropolitan area, banks are the largest buildings in the city. The largest industry in nearly every country is banking. Banks know more about consumers than any individual brand. We think Facebook and Google know a lot about who we are, yet while they do, the banking industry has far more impactful information about their accountholders. As an individual, my bank knows every transaction I have made over the past 10 years. They know my travel habits. They know the brands I favor. This information is not objective; it is transaction based and captures my actual buying behavior.

What can banks do with this enormous amount of data? Using a consumer’s transaction history, banks can build propensity models to predict future transactions and send their opted-in accountholders cross-promotional offers and notifications to their mobile devices. This type of mobile engagement can result in promotional redemption rates of up to 50 percent.

A McKinsey & Company study on the future of mobile banking in Europe further supports the banking industry’s charge to engage with its customers. In the study, 70 percent of bank executives said they plan to add advanced mobile functionality beyond basic account access. The majority of the executives said that they see the mobile channel capturing up to a quarter of all transactions as customers shift from standalone branches to the convenience of mobile.

There are two mobile tools in particular that are critical components of a mobile engagement strategy. The topics below outline how banks can combine these two tools with other mobile marketing technologies to create tailored, cross-channel mobile experiences based on customer preferences.

Text messaging

Although the app has risen to become the centerpiece of many companies’ mobile strategies, apps face several challenges. Setup can be cumbersome and time-consuming, with detailed and tedious password and security settings. Moreover, apps are reaching a point of oversaturation, with less than half of people in the United States not using a downloaded app more than once, according to research company Onavo. For these reasons, banks must look beyond apps and integrate messaging as a fundamental part of their mobile engagement strategy.

The answer to this challenge lies in the power of messaging. In a mobile world of multiple devices, operating systems and service providers, text messaging— SMS and MMS — is the one constant that offers a single channel that all users can communicate through. As a result, messaging offers a core component of mobile engagement for banks. For example, banks can leverage two-way text messaging to enable conversations to take place with customers in real time or use text-based campaigns to drive continued app usage.

Light apps

Light apps represent a newer mobile channel that is offering a growing number of ways for banks to engage their customers. Programs based on light apps – which are built in a mobile operating system and include systems such as Apple’s Passbook – provide a digital representation of information that might otherwise be carried on small pieces of paper or plastic, like coupons, tickets and credit cards. Among their benefits, light apps can be triggered by time or location, and thereby offer a range of new possibilities for banks to more closely engage with customers. For example, light apps could provide real-time account notifications that don’t require an open app or a login to an account.  

Cross-channel communications

Newer mobile channels like light apps and social media have now combined with more traditional channels like messaging and email to present an ever-wider range of options for customers to engage with banks. For this reason, it’s critical that banks offer a cross-channel mobile engagement program with a full selection of ways for customers to tailor mobile communications to ways that best suit their preferences. What’s more, for urgent communications – such as alerts about suspicious account activity – banks should also offer the capability to assign priorities to various stages in a communication process by  escalating message delivery through multiple media in specific sequences. For instance, if a customer didn’t respond to an urgent email, the message could automatically be escalated to a push notification, then a text message, and then a voice call. 

Banks now have an unprecedented opportunity to engage their users with more personalized mobile communications, and customers are demanding nothing less. Text messaging, light apps and cross-channel communication offer three critical ways to serve the revolution in mobile engagement.