Creating Great Mobile Apps for Customers: Effective Practice and iGaranti's Story

Mobile changes everything. That was our hypothesis going into this research, but we were still surprised at the speed of mobile adoption by customers and mobile’s impacts—including on the bottom line. In MIT CISR’s first briefing on mobile strategies[foot]P. Weill, S.L. Woerner, and P. Reynolds, “Mobile Customer Engagement Pays Off,” MIT Sloan CISR Research Briefing, Vol. XIV, No. 9, September 2014, https://cisr-mit-edu.ezproxyberklee.flo.org/publication/2014_0901_MobileCustomerEngagement_WeillWoernerReynolds[/foot]we shared that 71% of the companies we surveyed set high goals for mobile customer engagement. Those that achieved their goals (43% of the total sample) also had net margins and revenue growth respectively 5.5 and 6.1 percentage points higher than their industry average. In this briefing we present an effective practices framework developed from case studies and a global survey of 334 companies. To illustrate the framework and show how companies can succeed in new market segments, we describe an innovative and successful mobile app that targets millennials, iGaranti, from Turkey’s second-largest private bank. 

What It Takes to Be Successful 

We’d like to start by describing the practices of top financial performers from our survey.[foot]To identify these practices we completed a series of case studies to identify key practices and then designed a survey asking companies about their most successful mobile app for customers (MIT CISR 2013 Mobile App Survey, N=334).[/foot]We analyzed the survey results looking at the top third of firms on growth relative to their industry average[foot] Percentages compare the top one-third of performers to the bottom third on industry-adjusted revenue growth. Customer data includes app user profile, app use duration, purpose of app use, and in-app purchases. Involvement is by senior executives, Marketing, IT, and Legal.[/foot] (the results for top margin performers are very similar). The differentiators for the top performers are the three factors in the center of figure 1: Design, Customer Engagement, and Connection. All companies want cool design, and to get it, successful companies devote on average 9% more of the app development budget to design, engage outside help with it, and involve customers 55% more in the process. Top performers have 10% better in-app customer engagement driven in part by features such as easy self service (e.g., the ability to complete a purchase in the app) and 25% more unique content. Finally, top performers have better connection to the platform, enabled by 33% more open APIs[foot]The top third of performers have 64% open APIs, versus 48% for those in the bottom third.[/foot] and more and better quality customer data that supports easy integration with partner services. 

The three differentiators—Design, Customer Engagement, and Connection—create initial value and customer confidence. As subsequent versions (or additional apps) are released, the three factors on the outside of the circle—Involvement, Reuse, and Speed—kick in and contribute even more value. By repeating the process of creating successful apps, top-performing firms achieve 15% more top management involvement, 14% higher reuse of data and system components,[foot]Reuse = the average of reuse of customer data, processes, infrastructure, products, and apps.[/foot] and 13% faster speed to market in their app development. And a virtuous upward spiral of value is produced, driven by increased customer adoption, top management confidence, and impact. 

Creating a Successful Mobile App for Millennials: iGaranti

All of the successful mobile apps we studied had very clear strategies. From the myriad of options available when building a mobile app, a strategy clarifies which are really important. One of the four strategies we identified for engaging customers via mobile apps is targeting particular groups.[foot]To learn more about the four strategies, see the September 2014 MIT Sloan CISR Research Briefing, “Mobile Customer Engagement Pays Off.”[/foot] Garanti, Turkey's second-largest private bank and the most valuable company on Istanbul's stock exchange at the time of this research, recognized that successfully engaging new, young customers would require a different approach than solely relying on its one thousand branches. iGaranti was born-a mobile app that serves as a smart financial coach and addresses the everyday financial needs of millennials. The multiaward winning iGaranti introduced some groundbreaking features that include[foot]Sources: Interviews with Garanti senior management, company documents, and the Garanti website.[/foot]:

• Recognition of a user’s favorite brands, based on spending patterns; and targeted and exclusive offers, often based on location 
• Estimation of monthly budgets with warnings and advice in regards to spending and potential shortfalls 
• Social connections via Facebook, etc. with peer-to-peer money transfers 
• Digital wallet capabilities
• Drag and drop tiles to customize the app
• Voice input and output, with an avatar

iGaranti was designed to target digital natives—ages 19 to 28—who live on their mobile devices. The goal was to attract young customers who don’t have a banking relationship and slowly introduce them to Garanti’s portfolio of products and services. By building strong engagement via the mobile app, Garanti hopes to make them loyal customers for life. A key design objective was to create an emotional connection with the customer, realized by making the app easy, social, proactive, and cool! iGaranti examines a customer’s spending patterns and sends him or her notifications and recommendations based on them; figure 2 shows the app’s money bar that displays these patterns.

So how does iGaranti fare when we apply our effective practices framework? Take a look: 

• Design: Investment in design was 10% of the app budget and based upon research of young customers. The design was joint work of Garanti and Fjord Design Company. Fjord took a user-centric approach and explored new patterns of behavior in Turkey, which has strong mobile penetration. The goal was, over time, to meet the financial objectives of a millennial through a one-stop app organized by customer need rather than by product. 
• Customer Engagement: iGaranti reached more than 300,000 downloads in the first year and 445,000 downloads by March 2015. The app has strong engagement, with 57% of customers who have ever logged in being active users. 10% of customers have applied for a loan in the first year, 16% have employed the app’s button to save money on impulse, and 7% use the connections to social networks. Customer engagement is enhanced by making every aspect of banking easy. For example, there is never a need to visit a bank branch—a courier visits the customer with documents if signatures are required. 
• Connection: All core banking services at Garanti are API-enabled and can be leveraged by any bank app or product. Even the data from customer use of the iGaranti app, including the notifications customers are sent, is made available across the bank to create new offers and identify trends. 
• Senior Management Involvement: A Garanti EVP championed the iGaranti concept. She then worked closely with the technology group and brought in other EVPs as needed to build confidence and commitment. 
• Speed: Fast time to market was achieved by using design workshops, wireframing, and agile development, and was aided by the availability of open APIs and a single bank-wide customer database.
• Reuse: Garanti has a policy to use the same core banking system services for all customer initiatives, allowing a write once, use many times approach with the single customer database. 

iGaranti is one of Garanti’s most successful mobile apps. Over the last few years, as Garanti started to focus on creating great mobile apps, it has achieved a 31% digital banking market share, with around 20% of product sales being digital. And 40% of Garanti’s active retail customers are regular users of mobile, positioning the bank very well for the increasingly digital economy. 

What Now? 

We still believe that every company—yes, every company—needs to master mobile apps. The good news is that the framework we’ve described can provide a roadmap for companies early in this challenging journey. Here are four actions every company could be taking now to create powerful impact from its customer apps: 

• Use mobile apps to ensure you have a customer-centric strategy. Mobile changes everything and allows companies to be much more focused— and get great data—on their customer needs. 
• Start building mobile app muscle today. Mobile capability must be learned and will challenge the status quo in your company. You don’t have the luxury of waiting. 
• Service-enable your key transactional systems—what makes your company great—and expose their APIs. Any group within your company (and potentially outside it!) can then build mobile apps that reuse the open APIs. This will improve speed to market. 
• Debate whether to have one mobile app or many. So far we see no best practice around how many mobile apps a line of business needs and how they link—just lots of interesting experiments.