While large banks may not feel threatened by personal finance apps or digital-only challengers, they can learn from them on the digital onboarding front, a recent Gartner study observed.

Gartner’s Digital IQ Index for 2019 surveyed 80 banking and financial brands, including national banks, regional banks, online banks and fintech startups.

It examined 1,200 data points across four dimensions, including site experience, digital marketing, social media and digital commerce. From the study’s findings, three brands were classified as genius (Bank of America, Wells Fargo and JPMorgan Chase); 22 were considered gifted; 21 were average; 25 were challenged and nine were feeble.

Where many banks fell short was on digital customer acquisition methods. In particular, Gartner observed that fintech startup brands including Dave, Digit, Chime and Greenlight typically focus on driving app downloads instead of website-based conversions, a method that it said was driving user growth among these platforms.

“Challengers have perfected the art of using their mobile apps for more than just servicing customers,” the study reported. “Fintechs are download first, enroll second, and 47% don’t even allow account signup on mobile sites without first downloading the app.”

Chris Bendtsen, financial services principal at Gartner L2, told Bank Innovation because fintech startups and digital-only banks don’t use physical distribution channels, they are more focused on digital, mobile-based customer acquisition funnels.

“Challengers are pushing the mobile app download in a much more ‘in your face’ way,” he explained. By contrast, traditional banks often don’t have an app download link on the mobile homepages.

On digital experience and conversion, challengers are outpacing incumbents on two fronts, including app downloads and monthly active user growth.

“One of the recommendations that we had is that traditional banks could at least start exploring the idea of downloading the app first and prospecting [customers] within the mobile app, including signing up for accounts in the app experience,” said Ross Cosner, vice president and analyst within Gartner’s digital benchmarking practice.

He emphasized that the mobile app should not be seen as a transactional tool, but as a primary means of generating new business. To emphasize the importance of the mobile channel, many fintech startups have purposefully made their websites not much more than referral channels to app downloads, he added.

See also: To grow deposits, digital isn’t enough: Forrester

Meanwhile, the study found that 73% of fintechs and 60% of online banks prominently displayed mobile app download calls-to-action on the mobile sites’ homepages, compared to just 53% and 42% of national and regional banks.

“At the end of the day, [digital-only challengers] are not trying to be all things to all people and have sort of a comprehensive product offering across every sort of consumer segment,” said Cosner. “They’re sort of outpacing the traditional brands because they’re delivering their focus on a holistic customer experience.”

The study outlined five key recommendations for institutions, including:

• Expanding mobile app product roadmaps to include prospecting capabilities
• Allocating an appropriate amount of media budgets to comparison sites that have high traffic or conversion
• Enabling mobile-optimized account enrollment for all products
• Investing in online-to-offline consistency by expanding branch locator functionality and calls to action for in-person visits and ATM locations
• Investing in contextual help capabilities such as searchable FAQs and features to mitigate abandoned transactions

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