Retail banks that offer segmented consumer experiences and advanced digital wallet capabilities are likely to realize a good return on investment, according to a new study from Cognizant and Monitise plc.

The study surveyed a diverse group of more than 700 consumers to understand their mobile banking expectations, emerging trends, and current and future needs. Increasingly, the study found, consumers expect banks to provide anytime, anywhere mobile capabilities, including customized user experiences, shopping and social features, and value-added services, and that represents a new opportunity for retail banks to drive customer loyalty, attract new business and generate more revenue.

A report titled "Segment-Based Strategies for Mobile Banking," based on the findings of the study, details consumer expectations and recommendations for banks to focus on continuing innovation and tailoring mobile strategies through consumer segmentation.

Key study findings include:

• Anytime, anywhere capabilities: Consumers are looking for greater functionality as they seek more options. This relates to segmentation of consumer interest and behavior. Interest in remote check deposit and real-time alerts on unusual account activity are important features across segments that could induce consumers to switch banks.
• Customized user experiences: Tablets have emerged as a unique and valued user interface, with 41 percent of survey respondents wanting to use tablets compared with smartphones, and 60 percent of tablet owners preferring a tablet for mobile banking. Consumers are now using both devices for different purposes and want features optimized to suit each device's form factor. Feature personalization such as rearranging tabs and functions is also important to more than 75 percent of the consumers surveyed. Offering this flexibility can give banks a competitive edge and help retain customers.
• Better shopping and social experiences: Consumers want their bank to offer better shopping and social experiences and also prefer offers from banks rather than other mobile payment mediums. By offering discounts and offers from retailers on consumers' mobile devices, retail banks can increase mobile payment traffic. Consumers are also open to using social networking features on mobile banking apps/websites for accessing information on new products and sharing opinions.
• Value-added services: Consumers are seeking services that drive security, ease mobile payment use and provide insights on spending and bill payment patterns, and they're willing to invest in these products. More than one-third of consumers surveyed are willing to pay for advanced security features such as biometrics, and nearly 30 percent of respondents indicated a willingness to pay for mobile payment capabilities.

"Amid the growing proliferation of digital channels and rapidly evolving consumer behavior, retail banks can no longer afford to adopt a one-size-fits-all approach in devising and enhancing their mobile strategies," said Vin Malhotra, consulting partner for banking and financial services with Cognizant Business Consulting, Cognizant's consulting practice.

"Providing innovative and personalized mobile services based on consumer segmentation will enable banks to not only run better by maximizing their investments, but also run differently by strengthening customer engagement and driving greater adoption of mobile banking for competitive differentiation."

Lisa Stanton, president of Americas at Monitise, said that smartphones and tablets are quickly becoming the main contact point between consumers and financial institutions. "Integrating value-added services such as mobile payments directly into a bank's mobile application doesn't just build customer loyalty, but it also grows revenue and fights the growing threat of disintermediation," she said.

The report was developed by CBC and Monitise, and the primary research for the study was carried out by Cognizant Research Center in conjunction with CBC. 

Learn more about mobile banking.