Younger generation keen on using mobile banking – report

A recent study titled “An international study of youth attitudes to banking and online banking services” and conducted by global digital security provider Gemalto, has tried to find out more, polling more than a thousand people aged 16-24 using online polls and a consumer database across the UK, the US, Mexico, Brazil and Singapore.

The report points out that according to the UK’s Office of National Statistics, half of adults and more than three-quarters of 25-34 year olds manage their money online. One in five people have made some kind of payment using their mobile, and a quarter use it to check their bank balance. In the US, 33% of all mobile users have used a mobile banking app in the past 12 months, up from 28% a year earlier.

Gemalto notes in their reports that they expected a lot of enthusiasm for mobile banking among ‘generation m’ (millennials) as they’re the first to have opened bank accounts with tried and tested mobile banking apps already in place, without needing a bricks-and-mortar, real world experience first.

The report also cites that financial institutions and banks that don’t provide a mobile portal or app often trigger a defection to a service that does. Not only that, but a poor mobile experience also does – this means that financial providers face irrelevance if they don’t provide ways to access their services on mobile devices. Simultaneously, the younger generation won’t tolerate poor security, and there’s an expectation that the banks will keep them and their details safe or risk losing their trust.

The way in which young people access banking services has seen a huge shift, the study highlights. Nearly 4 in 5 (77%) use online banking services, with 42% using them 5 times a month or more. More than 3 in 5 (62%) use mobile banking apps and almost half (47.6%) bank by phone. Over a quarter (27%) of respondents in Gemalto’s study never visit their branch in person anymore, and a further quarter (27%) goes just once per month.

Although mobile and online are increasingly the preferred methods of choice for accessing banking services, trust in banks remains high; which is surprising in the post-2008 economic crash era, where global trust in banks has arguably fallen to an all-time low, the research adds.

Only 16% of respondents in the study said that they trust their mobile provider more than their bank. But security is still near the top of the agenda, with two thirds (66.5%) admitting to concerns about the risks of using a smartphone or tablet for banking.

The report indicates that when it comes to mobile banking, the range of services on offer is important. Young people are using their banking apps for a variety of tasks– from applying for loans (3.7%) and viewing their balance (9%) to making domestic transfers (25.6%) and paying bills (40%).

Last but not least, the study warns that ease of use is crucial and that young people don’t have much patience when it comes to bad service – 68.4% would use apps less if they were difficult to use, while 36.6% would be prepared to change their bank altogether, highlighting the importance of the mobile channel within this segment.