What Makes a Mobile App Great?

Bank transactions are shifting rapidly from brick and mortar branches to mobile devices (no, really, when was the last time you’ve physically deposited a check?). Having a mobile app used to be a lovely addition to lenders’ offerings, but for many customers today those apps are the primary method of communication with their finance providers. So how do auto lenders insure that their apps hit the mark?

Above all, mobile apps for financial services must be intuitive, said Chris Martin, senior vice president of regional service centers at Pentagon Federal Credit Union. “Our members like to have all the new features of their smartphones incorporated in the app,” he said. “So we look for ways to adopt those features, in a way that would make sense from a usability standpoint.”

3D Touch, one of the recent functionalities introduced on the iPhone 6S, is one such case. “We are looking into how you can enhance navigation through 3D Touch,” Martin said. “Trying to balance hardware enhancements with accessibility, so that all our member can make use of the new features, is an interesting task.”

Auto lending is “one of the most important product lines” at the more than 1.4 million-member PenFed, Martin said. In fact, PenFed is the nation’s sixth largest auto lender among credit unions, according to 2015 Big Wheels Auto Finance data. Thus, car financing features on the lender’s mobile app are updated regularly. Currently, new customers can view the status of their auto loan application in real time. Existing borrowers can view the outstanding loan balance, make payments, set up push notifications on payments, as well as send and receive secure messages to customer service representatives.

Keeping up with fresh features, however, takes an entire team. A few years ago, PenFed put together a cross-operational team consisting of employees from various departments, including IT and marketing, Martin said. The team — which is still together — also constantly monitors customer feedback on the iTunes App Store and Google Play.

“We did a release a little less than six months ago, with stylistic changes, to give an enhanced look and feel to the app, but almost immediately our members responded that they don’t like it. So we got our team together and fixed the problem — which is also a way to show your members that their voice matters,” he said. PenFed’s app has a 4.5 out of 5 rating on both iTunes and Google Play.

Speaking of ratings: Autolist, the self-proclaimed “Kayak for carbuying,” currently enjoys a 5 out of 5 rating on iTunes, and a 4.5 out of 5 on Google Play. How does the company ensure such a feedback?

“Design and function,” said Autolist President Corey Lydstone. “Every year or so, we look at the app from a design perspective: The key is to focus on not just making it ‘design-y,’ but on improving the user experience.” The company doesn’t “rush into it” when it comes to news tools, and closely monitors user behavior and conversion behavior every time an update is introduced.

“It’s a similar mindset from a functionality perspective. Just because there is force touch [3D Touch] doesn’t mean you have to jump to implement it,” Lydstone said. “We focus on finding a very good use for it, first of all, not just introduce a fancy new tool.”

Starting off as part of a popular apartment search platform ApartmentList, Autolist became a separate entity two years ago. The company received a $2 million credit facility from partner Square 1 Bank, and said it may be looking into other possible partnerships to introduce financing capabilities on its platform.

For startups like Autolist, experimenting with new app tools may be easier than it is for legacy companies that have to go through many layers of the approval processes, said Paul Schauss, chief executive and founder of Phoenix-based CCG Catalyst Consulting Group. Security is a big factor, he said.

In fact, 82% of 580 mobile banking users surveyed for the NetFinance 2016 Consumer Study said they were concerned with security threats in mobile banking. “While security is still a major concern among bank customers who have already made the jump to mobile, it is proving to be a persistent barrier to those who have not yet tried it,” according to the study, published in February. “Concerns around identity theft in particular have many bank customers [67% of those surveyed] wishng for biometric security features as well as stronger mobile firewalls and antivirus software.”

Biometrics — which refers to authentication techniques that rely on measurable physical characteristics that can be automatically checked — is an evolving field, and PenFed is looking into adopting pattern login, and voice biometrics in the future. “For our size and scale, security is paramount, and we will typically lag behind some startups in introducing new functionalities,” Martin said.

“But where we really see an innovation opportunity is making it possible for new members to apply for new-car loans through the mobile app,” he added. “We are in the process of mapping out a huge catalyst for change, the next big transition in the mobile banking space, where we’ll switch our app from a customer maintenance channel to a customer acquisition channel.”

Martin hopes the big change will happen in the next six to 12 months. “Mobile adoption is skyrocketing,” he said. “It’s our fastest-growing channel, surpassing call center or branch use, and we feel the need to leverage that.”