Although the digitalization of financial services is nothing new, the mobile-first approach has become a key factor in the competitiveness of fintech and banks. Today, 93% of financial institutions are already modernizing their payment infrastructure, and the primary motivation is to meet the growing consumer demand for fast, intuitive, and secure digital experiences. 

At the same time, adopting artificial intelligence, open APIs, and instant payment models accelerates this transition and reshapes how people and companies interact with financial services. But how is this approach transforming the sector, and what challenges still need to be overcome?

The mobile-first evolution in financial

Previously, banking digitalization focused on adapting traditional systems to the mobile environment. Now, the logic has been reversed: institutions are prioritizing development for mobile devices before expanding to other channels. This reflects the reality of the market, where most transactions take place via mobile devices.

A KPMG report shows that 58% of consumers expect convenience and speed as the main factors when choosing a financial service. However, mobile-first modernization is not just about the interface—it involves a scalable backend, cloud infrastructure, and AI integration for personalization and security.

The role of modern payments

Payments modernization is in line with this shift. According to a global study, 85% of financial institutions already use AI for payment automation and security. Some of the trends driving this evolution include:

• Digital wallets and QR codes have become standard in Asia and are growing in Western markets.
• Instant payments and open banking which reduce intermediaries and improve the user experience.
• Buy Now, Pay Later (BNPL) models drive new credit and loyalty formats.

It is no coincidence that banks’ average budgets for payments modernization already exceed US$18 million, reflecting the strategic impact of this transformation.

The impact of AI and personalization

The advancement of AI has brought fintech companies a new level of mobile-first experience. 76% of banks already use AI for fraud detection, analyzing millions of transactions in real time and reducing financial losses. 

In addition to security, AI significantly improves personalization. With machine learning and predictive analysis, banks and fintech can:

• Create personalized credit offers based on user behavior.
• Improve the experience with intelligent chatbots, which are already replacing human interactions in customer support.
• Implement personalized financial recommendations, from investment suggestions to overspending alerts.

This hyper-personalization not only increases engagement but also increases customer retention and reduces operational costs.

Mobile-first challenges transformation

Despite the potential benefits, transitioning to a mobile-first approach encounters obstacles, particularly within traditional banks. The primary challenges include:

1. Integration with legacy systems

While digitally native fintech operates with agility, traditional banks still rely on complex legacy infrastructures. 52% of financial institutions say that integrating new systems into the existing ecosystem is the biggest challenge to modernization.

2. Security and regulation

The rise of digitalization heightens the risks of cyberattacks and fraud. CEOs of large banks point to cybersecurity as the biggest threat to the sector’s growth​. To mitigate these risks, companies are adopting:

• Biometric and multifactor authentication for payments and access.
• AI is used for fraud prevention and reducing suspicious transactions.
• Automated compliance models, ensuring regulatory compliance.

3. User engagement and financial education

Although the adoption of financial apps is growing, only 3% of customers use all the available customization features​. This shows that, besides innovation, institutions must invest in financial education and intuitive design to engage users.

What comes next?

The upcoming decade will witness an even deeper transformation in mobile financial services, with emerging trends already gaining traction, including:

Open finance and integrated ecosystems

Open Banking enables connectivity between different financial platforms. Still, the future lies in the transition to Open Finance, where insurance, investments, and credit will be fully integrated, creating fluid and interconnected experiences.

Generative AI in the financial experience

Banking CEOs are already placing generative AI among their top investment priorities. With it, we can expect:

• Personalized financial assistants function as automated “financial concierges”.
• Predictive risk models, optimizing credit, and preventing defaults.
• Automation of banking processes, reducing costs and improving operational efficiency.

Expansion of digital identity and blockchain

Digital security will increasingly be based on blockchain and decentralized identity, enabling more secure payments and financial transactions and eliminating intermediaries.

The future of financial services is mobile

The convergence of technologies is shaping a future in which smartphones will become consumers’ primary financial hubs. Success will depend on institutions’ ability to deliver seamless, secure, and personalized digital experiences, ensuring access to financial services anytime, anywhere.

The mobile-first revolution is not just transforming the user experience; it’s redefining the very concept of financial services. For banks and fintech companies, the challenge now is to continually innovate to meet the expectations of an audience that demands more speed, security, and personalization than ever before.

 Luby can help your business transform the financial experience with a mobile-first approach. Talk to our experts!