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The news: Klarna is pivoting toward digital banking in the US, preparing for its IPO amid growing scrutiny of the buy now, pay later (BNPL) market. This includes launching US debit cards and expanded savings offerings, with Klarna rebranding itself as a neobank aiming for a "super app" experience. Our take: This signals a broader trend of fintechs evolving into banks, intensifying pressure on traditional financial institutions (FIs) to differentiate. FIs must clarify their niche, pursue strategic scale, and accelerate digital transformation. Despite Klarna's expansion, FIs retain a key advantage: their card-based installment plans still outperform BNPL in customer satisfaction.

Why this matters: We already know that fintechs are outpacing traditional financial institutions (FIs) in new account openings, but that alone wasn鈥檛 alarming鈥攂ecause users could have been searching for specific features offered by fintechs and not their banks, while still keeping much of their banking activity with FIs.

This bodes well for fintechs trying to build out their financial services offerings.

But to prevent them from opening secondary accounts, FIs should be working toward expanding their mobile apps and digital offerings鈥攐r a super app. To learn more about the emerging mobile banking features customers want most, read our 鈥淯S Mobile Banking Emerging Features Benchmark 2024鈥� report.

Consumers worldwide want more from their mobile banking apps. Here are three charts that examine what consumers are looking for and how meeting demand benefits banks.

Our fifth annual study ranks Canada鈥檚 top seven banks on mobile app innovation, based on an exclusive survey about what features consumers value most.

The news: CI&T and Project Nemo have developed a prototype app called Nemo, Art of the Possible, designed to help adults with learning disabilities manage money independently and securely, per Stock Titan. The app includes calm mode, adaptive onboarding, emergency savings, and user-controlled support to promote financial inclusion. Our take: With one in five US adults experiencing learning or attention challenges, banks have a major opportunity to broaden access. By partnering with fintechs to deliver inclusive tech like Nemo, financial institutions can better serve underrepresented users and improve financial health, experience, and loyalty across their customer base.

The news: A superior digital interface directly correlates with customer care, boosting recommendations and loyalty. Personalized digital engagement, where banks anticipate Gen Z's needs and provide relevant recommendations, also builds trust. Our take: To combat Gen Z's distrust, banks must prioritize brand authenticity and enhance the digital experience. Banks should invest in seamless onboarding, intuitive mobile apps, and relevant personalized recommendations. Failure to do so means digital competitors will continue to capture this emerging generation of wealth builders by operationalizing care through design and data-driven personalization.

Truist is making significant strides in optimizing its digital onboarding process, prioritizing increased personalization and a smoother customer journey to attract new clients. This multi-pronged strategy includes enabling mobile ID verification to boost conversion rates among younger generations, seamlessly integrating new clients with services like direct deposit and Zelle to establish Truist as their primary bank, and allowing personalized mobile app dashboards. These digital improvements, supported by AI for feedback aggregation, aim to offset the impact of branch closures and meet the demand for digital convenience, particularly from Gen Z. Truist should amplify marketing efforts to highlight the ease and speed of their fully digital onboarding, emphasizing that no in-person ID verification is required.

Canadian banks have heavily invested in digital development, yet their mobile apps remain uniform and lack standout features, according to J.D. Power. While mobile apps perform reliably, satisfaction gains are seen mainly in credit card and website platforms. AI integrations like virtual assistants have failed to personalize experiences. Key missing features include clear transaction data, stored debit cards, and Gen Z鈥檚 most demanded functions like electronic direct deposits and subscription controls. To differentiate, banks must enhance mobile app experiences by adding unique, customer-desired features and improving personalization and security.

These include streamlining the application process, building out digital tools, and preparing for alternative financing models like crypto and peer-to-peer lending. As mortgage rates and competition for loan customers remain high, traditional players that invest in the customer experience will be better positioned to convert hesitant buyers when the market turns.

National Bank is distinguishing itself as the first major Canadian bank to implement a secure data feed (API) for its retail customers to share financial information with approved fintech applications, putting it ahead of Canada's potential 2026 open banking rollout. This innovative approach significantly reduces security risks by redirecting customers to National Bank's own website for identity verification, eliminating the need for customers to share online banking passwords with third-party aggregators (known as "screen scraping"). By taking an 80% stake in Flinks, a financial data aggregator that now accredits fintechs, National Bank transforms a potential threat to customer loyalty into an opportunity to deepen relationships, ensuring it remains the central hub for customers' financial lives even as they use other apps.

Macroeconomic uncertainty and an overreliance on Cash App led the company to slash its full-year guidance

A large majority of US adults under 35鈥�60% of adults aged 18-24 and 62% of adults aged 25-34鈥攎ainly use a mobile app to interact with their bank, according to September 2024 data from Fico.

Our eighth annual study reveals which of the 10 largest US banks lead in mobile app innovation, based on an exclusive survey of which features mobile banking users value most.

Multi-industry players have the power to redefine the future of commerce media advertising. Unlike in the US, where retailers and FIs typically operate independently, many Latin American retailers act as financial services providers鈥攐ffering credit lines, digital wallets, and other banking products to unbanked and underbanked consumers.

What this means for banks: Securing account primacy is yet another reason why moving toward a "super app" model鈥攐r at least enhancing existing platforms with seamless, AI-driven features鈥攊s so important. Offering more in-demand services all in one place reduces the need for customers to bank elsewhere. It鈥檚 banks鈥� best bet for securing more primary accountholders in the era of multi-banking.

Cash App. Visa. Apple Pay. Venmo. Key takeaways: Gen Alpha鈥檚 preference for digital competitors likely means these payment apps provide the banking basics Gen Alpha needs at this stage. And that includes the ability to buy what they want, pay and receive money from friends and family, and save some money. They may not be interested in more complex banking services at this time in their lives.