Mobile banking outlook for 2023: Why push notifications are more important than ever

By Gregg Hammerman, Chief Executive Officer, Larky

About two-thirds of the U.S. population – nearly 203 million people – use digital banking services today, a figure projected to reach 216 million by 2025. This trend forces financial institution leaders to rethink how to reach and engage with their customers. Enter push notifications – these brief messages that originate from a mobile application are ideal for proactively reaching and engaging account holders exactly where they are, delivering targeted communication directly to their mobile devices.

Mobile banking is at an all-time high

The mobile banking market has grown considerably due to consumer demands for self-service and real-time access to financial accounts. Mobile banking apps offer an enticing experience with a wide array of convenient banking features including streamlined account management, seamless fund transfers, timely fraud alerts and digital check deposits. In 2020, about 80 percent of smartphone users made purchases through their mobile devices, and 86 percent of Americans used their mobile devices to check their account balances.

According to Bankrate, 61 percent of account holders are regularly using their providers’ mobile banking apps, which means the next step for financial institutions is to employ tools that can continuously sustain and grow that app engagement. Leveraging push notifications enables financial institutions to take advantage of the spike in mobile banking and engage customers on a more frequent basis. Sending out push notifications with actionable offers and reminders gives banks and credit unions stronger opportunities to compete for account holder attention and seamlessly drive mobile banking app usage.

More generations are turning to their devices

While most mobile banking users are members of younger generations, older generations are also embracing digital banking methods at increasing rates. Over half of all consumers within every generation group below the age of 76 – Gen Z, Millennials, Gen X and Baby Boomers – have adopted mobile banking. When these consumers are further segmented into individuals who own a smartphone, the adoption rate increases to 90 percent or more for every generation. As today’s younger generations become poised to access mobile banking platforms, the power of push notifications is clear: they allow financial institutions to better support app users by connecting with them directly through their devices.

Account holders expect personalization

As more consumers access their financial accounts through mobile methods to achieve greater convenience, they expect a seamless, customized experience. Financial providers aiming to deliver upon this expectation must gain permission from their account holders to track their data in order to translate this information into higher levels of personalization. Today, consumers are more concerned about the use of data tracking, which means it is the responsibility of financial institutions to clearly explain how each customer’s privacy will be upheld, as well as how the data is leveraged to create a more individualized banking experience.

Push notifications enable banks and credit unions to share customized offers and relevant services depending on the needs and preferences of each account holder. By distributing tailored alerts, customers will be more likely to interact with notifications, engage with their mobile banking app, and explore additional solutions they otherwise may not know about.

Demands are growing for stronger security

With the substantial increase in mobile banking adoption, fraud-related risks are a looming concern for roughly eight in ten mobile banking users today, which has fueled demands for stronger digital security measures. Among surveyed mobile banking users, security was ranked as the most prioritized mobile banking feature.

Many banks are stepping up to address these concerns and empower customers by implementing advanced technologies such as biometric authentication, device recognition tools, behavioral analytics, and more. Push notifications can provide additional reassurance and strengthen account holder confidence in the safety of their provider’s digital channels by delivering timely alerts on any potential account security risks. While spam messages regarding financial accounts can be sent through emails and SMS texts, push notifications offer a more reliable communication method that account holders can trust is coming directly from their financial provider's app.

Preparing for the year ahead

Looking ahead, mobile banking is expected to experience prolonged growth in adoption rates among consumers. As more and more consumers make the switch to digital banking, using push notifications offers a compelling, customizable way for financial providers to meet shifting account holder preferences, gain a competitive edge, and proactively engage mobile banking app users.