Morgan Stanley
  • Research
  • Feb 01, 2021

What Makes a Good Banking App?

Morgan Stanley’s latest analysis of Australian banking apps shows a trend towards alternative payment methods, personalised budgeting and lifestyle features.

The focus on digital

With banking apps increasingly popular due to their ability to allow customers to perform a range of tasks without having to visit a branch or logging on to a computer, their features and functionalities are more crucial than ever to attract and retain customers.

As the post-COVID move towards digital banking accelerates, Morgan Stanley Research expects banks will need to offer new, convenient and personalised digital experiences in order to keep up with the trend. 

Key trends and new app features

Morgan Stanley Research created its first ‘App Functionality Scorecard’ in May 2019, which is a weighted scoring mechanism for Tier 1 and Tier 2 product features on the major banks' mobile banking apps. This was based on the research team’s view of the most important features for retail customers, with Tier 1 features being crucial and Tier 2 features that are nice to have. At the time, 24 app features were highlighted and sorted into six broad categories: security, savings, lending, payments, budgeting, lifestyle and loyalty.

The latest App Functionality Scorecard published in January 2021 includes 16 extra features, such as:

  • alternative payment methods, including digital wallets and buy-now-pay-later (BNPL) options.
  • the use of data to predict upcoming bills, find and claim government benefits and rebates, and provide utilities comparison and switch features.
  • lifestyle features outside of traditional banking, including loyalty programs and rewards.

The latest scorecard shows that while the leading bank app received high scores with its integration of new payment methods such as smartwatch payments and personalised services such as bill prediction and loyalty program integration, others fell behind and missed these key features. It is also clear that there is an overall trend towards providing more convenience and the use of individual customer data to make app features more personalised.

Interestingly, compared to the May 2019 scorecard, the major banks' app scores only marginally improved, indicating that the banks have focused their efforts on developing new features rather than improving existing ones. 

What could be next?

As digital offerings continue to evolve and adapt to individual customers’ desire for greater control and knowledge, Morgan Stanley Research predicts the following four trends in banking:

  • all banks will utilise customer transaction data to provide more personalised offerings.
  • integration of more alternative payment methods will increase.
  • there will be more loyalty features.
  • as mortgage competition intensifies, the ability to quickly carry out identification checks and income/expense verification via apps will become important.


For more on banking trends, or to read the full Morgan Stanley Research report, “Which Bank Has The Best App?” (11 January 2021), speak to your Morgan Stanley financial adviser or representative. Plus, more Ideas from Morgan Stanley's thought leaders.