Sure, friendly bank tellers that smile and give you a piece of candy (if you’re lucky) can help with all your banking needs, but many people — especially young adults — would rather forgo these brick-and-mortar niceties in exchange for more mobile banking options.
An April 2015 Mercator Advisory Group mobile banking survey revealed a correlation between consumers who use mobile banking services and how often they change financial institutions, particularly those between the ages of 18 and 34.
Mobile banking is favored for its convenience and “on the go” accessibility, especially for making transfers into other people’s accounts, which has become one of the fastest-growing mobile banking activities, according to the Mercator survey’s findings. Approximately three out of five consumers use mobile banking services on a smartphone or tablet — a steady increase from the nearly half that did so in 2013 and one-third in 2012.
“More consumers, however, are reevaluating their financial institutions, especially young adults and mobile banking users, who are more likely to open new accounts and switch their primary financial institutions,” said Karen Augustine, manager of Primary Data Services for Mercator Advisory Group, in the report summary.
Young adults have always been more likely to change banks or credit unions, but this activity has increased in recent years. Approximately 31 percent of young adults and 28 percent of other mobile banking users surveyed in 2014 reported a financial institution switch during the past two years, compared to 20 percent who reported doing so in 2013.
Both groups are now twice as likely as the average consumer to switch banks or credit unions — only 16 percent of other consumers reported switching in the past two years, and the switches aren’t all about added convenience.
“Consumers are increasingly confident in the security and reliability for banking,” Augustine told CreditCards.com. “But again, young adults lead the confidence level as 56 percent feel that their mobile phones are secure for mobile banking and 61 percent say they are reliable.”
For banks and credit unions already wondering what to do to retain millennials’ banking business, strengthening mobile services may be key.
Even if financial institutions aren’t all that worried about millennial retention, ensuring mobile banking services are up to par may give traditional banks and credit unions longevity as more people turn to digital financial tools, such as apps, virtual wallets and even digital currency.
A whopping 64 percent of American adults own a smartphone of some kind, according to a Pew Research Center 2015 mobile phone use survey of 2,002 adults. Additionally, 57 percent of smartphone owners have used their phones to do online banking.
So that means, using the current U.S. adult population of about 237 million per the U.S. Census Bureau, approximately 151 million people have smartphones and 86 million of those individuals use their smartphone for mobile banking.
That’s a lot of digital bankers, regardless of how old they are.
As a young adult (or millennial, however you want to classify me) who has used online banking services ever since I’ve had my own checking account, I completely understand the desire for mobile convenience when it comes to banking.
Even before I had a smartphone, I accessed my bank’s website on a desktop computer to check balances, make transfers and pay bills on a regular basis. That was — and continues to be — way more convenient than rushing to a bank through traffic to get there before closing time just to make a deposit or something of that nature.
I don’t think I’d uproot my established banking relationship just for mobile service improvements like others my age, but when I switched banks out of necessity after a cross-country move last year, I definitely took mobile banking features into consideration.
Smartphone app? Check. Remote deposit options? Check. Online bill pay? Check.
I think the Mercator Advisory Group findings reinforce consumer sentiments that have existed for a while now. It’ll be interesting to see how traditional brick-and-mortar banks respond to their increasingly digital-savvy consumer base.
Now if only we could figure out how to get candy from our smartphone after making a mobile deposit…