Has the phone replaced the branch for millennials?

Smartphones have revolutionized how people across the world, in particular young adults, manage their finances.

For instance, in the UK, research by Visa has revealed that 69 percent of people aged between 18 and 34 have used a mobile banking app, while 53 percent do so regularly.

This is considerably higher than the overall total, with figures showing 38 percent of adults in general frequently conduct their banking via an app.

A similar trend was identified with alternative means of payment. For example, 59 percent of millennials have made a peer-to-peer (P2P) digital payment via a mobile device, compared with just 34 per cent of adults across all age groups.

Meanwhile, 35 percent of 18 to 34-year-olds said they would rather make P2P payments using biometric technology, whereas the national average was just 30 per cent.

In addition, 37 percent of millennials said they would like to use biometrics in tandem with a banking app, compared with just 31 per cent of adults overall.

The figures highlight two key issues for financial services providers – young adults are increasingly embracing new digital ways of managing money, but the lower take-up among older people means there is still a valuable role for traditional financial services outlets, too.

Indeed, a survey by TimeTrade in the US found that almost half of credit union members visit a branch at least once a month, while three-quarters say visiting a branch is their main way of interacting with their credit union.

This appears to be partly related to the level of service physical sites can offer, with eight in ten consumers saying branch staff offer them a personalized experience, while nine in ten believe they are knowledgeable and able to help.

The message for financial services providers could therefore be to invest in both traditional and alternative means of managing and moving money to cater for all demographics, and to ensure digital options offer a personalized service tailored to each individual.

The popularity of mobile technology among younger customers suggests this market will only continue to grow in the future, so financial services providers may need to look at incorporating fintech more extensively into their customer-facing operations.

 

Image: iStock/diego_cervo

Written by Jack Dougal

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