If loyalty programs aren’t the cost-effective solution to driving customer spending that they once were, what other areas should banks look to invest in? Digital banking engagement - which includes user-friendly banking apps, seamless online experiences and innovative mobile payment solutions - could be the answer.
Improving the user experience of digital banking apps can provide immediate value by giving customers more control over their spending. Features like instant transaction notifications, single-tap card freezing and personalised spending insights can help make customers feel more secure. And customers that feel like they’re in control should be more confident to use their cards more frequently.
Streamlining the digital onboarding experience is another area that could prove an effective use of resources. While traditional paper credit card applications can take days or even weeks to process, digital onboarding allows customers to apply, verify their identity and receive approval in minutes. This speed and convenience can improve application rates, helping banks acquire new customers more efficiently.
Data strongly supports investing in digital engagement:
- 75% of customers value user-friendly apps
- 60% value mobile payment capabilities
These digital engagement features are considered so valuable that customers rank them higher than traditional differentiators like brand reputation (53%), personal consultation (51%) and branch networks (43%).
The argument for investing in digital is even stronger among younger customers. For people aged between 16 and 29, the numbers jump to 87% valuing app user-friendliness, 79% valuing full-featured online banking and 78% valuing mobile payments. As this demographic gradually forms the core banking customer base, meeting their expectations will become increasingly important for DACH banks.