The rise in digitalization is transforming the banking and financial services industry. Every day individuals are turning to mobile banking apps over bricks-and-mortar for more efficiency, speed, and ease in their daily lives, now more than ever. However, despite a dramatic increase in mobile banking, the adoption rates of anti-fraud protection to combat advertising fraud by banking apps have stayed relatively static.
By providing an app, banks can make the process smooth for customers when completing transactions and managing accounts. With over 90% of the UK alone using online banking in 2022, according to Statista, this provides an opportunity to outperform rivals and better position themselves in a market that is ever more crowded. Companies utilizing digitalization and improving customer experience will see a rise in customers and, hence, will generate more profit from their operations.
However, there is no benefit in investing more money into mobile marketing without clarifying that budgets return maximum investment. Apps must invest in the proper marketing channels and remove invalid traffic from infiltrating their campaigns to see an increased return on investment (ROI). The truth behind invalid traffic is that financial organizations are laser-focused on their cybersecurity efforts.
Who cares if $VRA solves a multibillion dollar problem with ad fraud creating easements and trickle down cost savings in the marketing industry?
— BlockTake (@TheBlockTake) September 3, 2021
Who cares that $TEL is bringing mobile banking to countries where they can't afford to open a checking account.
However, the industry is losing millions yearly due to a lack of awareness or proactivity around advertising fraud. Digital ad spending loss to fraud was estimated at $68 billion in 2022 and is predicted to rise to $112.6 billion in 2026, Juniper Research revealed.
Ad fraud is a subset of invalid traffic. It includes a variety of tactics, such as click injection and click flooding from bots used to prevent digital ads from being delivered to genuine audiences. This essentially sabotages the advertising efforts of a business for financial gain. It impacts every campaign type, no matter the objective.
For advertisers in markets where mobile banking penetration is low, such as Italy, which Statista reported was only 36% in 2021, building a customer base is a focus, and user acquisition is the priority. Fraudulent clicks will never convert to actual app users, meaning banking companies fail to climb the app store charts and increase new customers.
As previously mentioned, retaining existing customers is a much more important priority in markets with high penetration, such as the UK. False installs and engagements distort metrics as marketers believe fraudsters are genuine customers. This means when advertising teams invest further to increase top-of-mind awareness, they'll use polluted data, and the wrong channels will be scaled.
💰Mobile banking apps are leaving customers “dangerously exposed” to fraud, with users at risk of losing tens of thousands of poundshttps://t.co/W48xtRYl8s
— The Telegraph (@Telegraph) May 3, 2023
Not understanding the true impact of invalid traffic in terms of hampered user acquisition and misattribution is incredibly harmful. Rather than banks benefiting from cheaper operational costs, improved user experience, and an expanded user base, invalid traffic is a severe risk to their growth in the mobile app industry. In the accelerating market, marketers cannot afford to analyze data containing artificially inflated traffic from bots to inform their scaling and budgeting decisions.
Finding a Solution
Excluding fraudulent traffic is a simple way to drive a return on investment with greater efficiency and trust. It starts with understanding the techniques for fraud prevention on mobile apps. Here are a few things to think about when it comes to securing your apps:
- Increase Visibility – Organizations may trust analytics from sources such as the app store that delivers surface-level data rather than any real insight into the quality of the traffic. This leads to growth strategies based on inaccurate information that ultimately halts growth altogether.
- Know Your Metrics – If marketers are experiencing unusual rises in traffic, clicks, and downloads, but their user metrics are falling or staying the same, mobile ad fraud may be present. This is often seen when user engagement is high during the early funnel stages but drops off quickly post-install.
- Monitor Your Mobile Measurement Partner – Trusting your MMP's attribution data alone will likely increase vulnerabilities as they only operate at or after the app install attribution rather than impression or click level. A partner who can complement your MMP to ensure installs are correctly attributed will improve traffic and genuine customers.
Creating Competitive Advantages
Across Europe, people benefit from taking care of their financial needs simply with a digital wallet. Research by Finder found that as of January 2022, over a quarter of adults in Britain had opened an account with a digital-only bank. Looking to the future, it is not only legacy banks launching apps, but digital banks are populating the online financial landscape and increasing competition.
Online banking apps have a target on their backs that is stunting growth. Invalid traffic and ad fraud are stopping businesses in the financial sector from reaping the operational and customer-centric benefits of having an app, which is causing damage to ROI. To gain a competitive edge over others in the industry, mobile banking providers need to eradicate invalid traffic from their campaigns and develop a flexible and efficient model that stops fraud before it can cause damage.
