Results from a survey conducted by Accenture indicate that the future of banking, money management and bill pay will transition even more from the bricks and mortar options that previous generations are used to, into the digital world. The findings revealed that nearly 40% of North American consumers age 18 to 34 would consider switching to an online-only bank, and that 30-40% would bank with a technology company over a traditional banking institution.
While the shift towards online banking is not all that new or surprising, the increase in demand for and acceptance of non-traditional banking options is on the rise. “Tomorrows consumer is coming of age with a very different perception of what a bank could be”, said Wayne Busch, managing director of Accenture’s North American Banking practice. There is already a large and growing U.S. unbanked and underbanked population who utilizes non-traditional banking services everyday as a result of a lack of options, barriers to entry and/or personal preference. But, we’re also seeing a shift in demand towards mobile and non-traditional banking options with younger generations; many are outwardly seeking new options.
The survey found that:
- 39% of customers 18 to 34 years old would consider switching to a branchless bank, compared with 29 percent of customers 35 to 55 and 16% of customers over 55
- 72% of consumers age 18 to 34 would be “likely” or “very likely” to bank with at least one technology, telecommunications, retail or shipping/postal company that they do business with if they offered banking services. 55% of consumers 35 to 54, and 27% of those ages 55+ would do the same.
The Pew Research Centre reported that as of January 2014 over 69 million Americans currently utilize online banking, which comes as no surprise as people become more comfortable with self-serve online options that offer convenience and ease of use. In fact, most people actually prefer self-serve options for menial tasks and simple transactions such as bill payment and money transfers. This is demonstrated as consumers increase their use of self-serve bill payment kiosks and mobile bill pay apps over visiting individual payment offices to make a payment, as these options meet their needs better, more efficiently and more conveniently.
The Accenture survey results indicate a negative correlation with age and the willingness to accept new ways of banking. Younger generations are much more willing to entertain non-traditional banking options than their parents. The deviation from the “conventional” to the “non-conventional” likely has a lot to do with a person’s comfort level with technology and willingness to disclose personal information to non-traditional institutions. It also comes down to simply what people are used to. Older generations may be more reluctant, younger generations value options and options that best fit their needs and lifestyles, and the underbanked population values a hand up to financial inclusion. Nonetheless, we will continue to see a shift towards non-traditional banking options such as mobile wallets, bill pay apps and money management tools.
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