Prepaid cards and mobile wallets have become major disruptive forces in the financial services industry.
In addition to giving consumers new vehicles in which to store money, bitcoin, Apple Pay, PayPal and others also bring new ways to manage transactions. And since these alternatives to paper cash are often combined with negligible interest rates, banks must continue to find new strategies to adapt to the rise of these new consumer banking options.
These payment products demonstrate the importance of mobile technology for financial institutions. Mobile is no longer for a small slice of society; it’s redefining the way people live on a global scale. Today,
In addition to the growing proliferation of mobile phones in society, the way we use them is evolving. Less than 10 years ago, many consumers were reluctant to dip their toes into the waters of mobile banking. But today, that’s changed. Even if you don’t personally use mobile banking services, there’s a good chance many of your friends and family do: Today,
The shift to mobile tech and the introduction of third party mobile payment wallets has caused another phenomenon: Banking with a brand-name institution is now less important to consumers.
Millennials, the generation characterized as “iGeneration,” are unsurprisingly leading the mobile charge.
Smartphones and tablets are central to Millennials’ “on-demand” lifestyle, making the mobile banking adoption rate for this group a whopping 46.6%. Globally, the millennial population looks to do their banking through a mobile app. Over 43% do it online via their bank’s website, while only 7.8% use a physical bank. This maps with Bank of America’s recent study, which found that
Generation X is also dipping its toes into mobile. Although Gen Xers display a willingness to adopt mobile across the board, they lack the enthusiasm of their millennial counterparts. The reason is threefold: decades of ingrained status quo banking, security concerns them, and some find their bank’s existing mobile interface or app difficult to work with.
However, Gen X consumers are becoming comfortable with the idea of more extensive mobile banking – and banks need to prepare for the swell in users, and accompanying demand for support these users will create.
There's also a growing number of mobile-only customers who have either stopped using or significantly reduced their use of other banking touch points. In
Mobile technology has also changed the amenities that consumers value in banks. In the past, consumers would consider factors like location, interest rate, and even personal relationships with bank staff before choosing a bank. But today, the decision making process is different. Because checks are now often deposited via smartphone and direct deposit, there is rarely a need to visit a physical brick and mortar bank location. That means amenities such as bill pay, lack of fees and control over money transfers have become more important.
Today, the landscape is competitive, to say the least. Banks compete against each other every day, courting customers with special offers and advanced services that promise to make their lives a little easier. Mobile capabilities are on this list – in fact, they’re among the most lucrative lures at a financial services brand’s disposal.
Lars Camp leads the business intelligence team at Apteligent.
