Gen Y: Leading the Technology Revolution

Gen Y consumers are quick adopters of new technologies, so it came as no surprise that Intuit Financial Services’ Fourth Annual Financial Management Survey found nearly half (48 percent) of Gen Y consumers currently use their mobile device to conduct banking activities, compared to only 15 percent of Gen X, Baby Boomers and Seniors.

While disparate in actual usage, all consumers share the same viewpoint toward the main barrier to adoption – 41 percent do not own a Smartphone. The survey also found:

  • Nearly one-third (30 percent) of Gen Y would switch financial institutions if theirs stopped offering mobile banking. Only 15 percent of Gen X, Baby Boomers and Seniors would switch.
  • Gen Y uses mobile banking the same way they use online banking – viewing account balances and transferring funds is ranked as most important (70 percent utilization), followed by bill pay.
  • Gen Y is three times as likely to use remote deposit capture for checks compared to Gen X, Baby Boomers and Seniors (12 percent versus 4 percent )They are also three times as likely to use a tablet to access and conduct banking (18 percent versus 6 percent).

Furthermore, Gen Y is more likely to voice their opinion and dissatisfaction with their financial institution – in fact, 42 percent have already or plan to switch where they bank due to increased fees.  As referenced in our recent post, How to Attract Gen Y Customers and Members, it is now more important than ever for financial institutions to provide solutions to satisfy all demographics.

How is your FI adopting to the ever changing needs of Gen Y? Do you have specific marketing campaigns targeting the Gen Y audience? Let us know by tweeting @Bankingdotcom or leaving a comment in the section below.

 

Women Call the Shots When It Comes to Banking

As women are taking a larger role in the economy, they require more tailored tools and solutions from their financial institutions. The Future of Financial Services Report indicated Gen Y women are expected to dominate higher education graduation rates and professional workforce entry, taking control of financial responsibility both as household CEOs, consumers and business decision makers fueling the She-conomy. Additionally the report states that by the year 2020, 60 percent of baby boomers will be women, the majority of whom will work beyond the traditional retirement age by starting small businesses and re-entering the workforce.

Women will hold a larger piece of the pie as is substantiated by reports from the CUNA Marketing and Business Development Council, which states that baby boomer women will control two thirds of consumer wealth over the next decade, and the book Women Want More which indicated by 2014 women could earn about $18 trillion a year and control as much as $28 trillion of spending.

With this customer segment growing in importance, financial institutions need to provide tools and solutions to not only balance a checkbook – but balance it all. Intuit Financial Services’ Fourth Annual Financial Management Survey found women have very strong opinions about the ways they like to bank.

Women prioritize online banking for convenient management of their finances:

  • One third of respondents said they would switch financial institutions for one that offers better online banking tools.
  • Women are also smart shoppers; 82 percent would use a service from their bank or credit union that provides discounts on products and services they already use.
  • Women are also high adopters of mobile banking to meet their busy lifestyle with more than one-fifth of women reporting use of their mobile device to access their bank account or use banking tools.
  • Mobile banking also serves as a good retention tool for this customer segment as 16 percent of women surveyed said they would switch financial institutions if theirs stopped offering mobile banking.

Lastly, in a time when consumers are finding their voice to demand the appropriate fees and offerings from their banks, 35 percent of women indicate they have already, or plan to switch where they bank due to increased fees.

Are you seeing women driving adoption of mobile or online banking at your financial institution? How do you see women shaping your financial management offerings? Let us know in the comments section below, or Tweet @bankingdotcom.

Banking Industry Leaders Discuss Findings of Intuit Financial Management Survey

*This blog was originally posted on Bank Marketing Strategy by Jim Marous. Jim is a marketing services leader focused on building strategic solutions for the financial services industry. You can follow him on Twitter @JimMarous or connect on LinkedIn.

In conjunction with the release of Intuit Financial Services’ 4th Annual Financial Management Survey, Banking.com hosted a Twitter Town Hall yesterday, bringing together financial industry leaders to discuss loyalty and channel migration as well as some of the challenges and opportunities facing the banking industry. The following is a recap of the very robust one hour dialogue. (The complete transcript can be found using #IFSsurvey on Twitter)

The Town Hall discussion began around the issue of customer loyalty and the finding that many consumers thought their financial provider was not ‘in touch’ with their needs. Given the events of the past week, where many large banks reversed decisions around the implementation of fees due to highly vocal negative sentiment amplified by social media and credit union trade group support, most participants believed that banks are not leveraging current insight and technology to make better decisions and provide value added service.

Tobin Lee (@Tobin_Lee), Intuit Financial Services spokesperson stated, “It is time for a banker mindset shift; cultivating deeper relationships, more meaningful engagement and stronger advocacy for growth”. Campbell Edlund from EMI (@EMI_mktg4sales) added, “These findings provide a very strong argument for a communications plan around the customer lifecycle”.


The already robust dialogue really took off as the discussion moved to the acceptance and utilization of banking channels (especially mobile and tablet banking). Bradley Leimer (@leimer) from Mechanics Bank in the San Francisco Bay area believed mobile strategy will be the key to future engagement due to the portability and ‘always on’ nature of the device. He also believed that the correlation between mobile banking and smartphone use (41% of respondents owned a smartphone) could indicate a lower engagement with financial technology in general for non-smartphone users.

Edlund added that while there is currently a higher penetration of smartphones than tablets, tablets can not be ignored by banks since Oracle found that tablet ownership is expected to increase significantly in the next year. She also warned that we need to be cautious not to get ahead of the acceptance curve. . . “we always underestimate inertia”. Brett King (@brettking), author of Bank 2.0 and founder of Movenbank went a step further stating that within 3 years all bank websites will need to be built for tablets first. He also believed that branches will continue to diminish in presence and utility (according to the study, 27% of respondents still visit their branch once a month in addition to ATM visits).

Mark Zmarzly (@BankMarketing) did not believe bricks and mortar would completely go away, but definitely felt the relevance of branches will change. “It’s easy to say branches will go away, but is that realistic? They have to evolve, but customers will never let them become 100% irrelevant.” King responded that with the drop in branch transactions, the economics of the branch are not working. I (@jimmarous) illustrated the model of Boeing Employees Credit Union in Seattle, where only 2 of the 40 branch network have tellers, while the installation of multiple ATMs at offices and around the city have an average of 10,000+ transactions each. 94% of the transactions at BECU are done electronically, according to Howie Wu (@howie_wu) from the credit union.

“Relevance is the key to banking for tomorrow,” stated King. “By 2015, mobile will be the #1 day-to-day channel, OLB #2 with the branch network being #5. The challenge for mobile and online will be developing great customer journeys”. King doesn’t believe these journeys exist today and believes the goal should be to have banking so pervasive that it is not tied to a branch, device or website, but is everywhere customers are.

Edlund pointed to the retail industry as a forerunner for what we will see in financial services. “Social and tablets will change the landscape in banking as they have in retailing”, Edlund stated. (During the Twitter Town Hall, there was even a discussion of the integration of TV as a channel for banking). Representatives from EMI in Boston (EMI_mktg4banks) emphasized that we will continue to see a blurring of all channels with social media providing some of the glue for enhanced communication. Gamification and location-based rewards were also seen as a key elements of engagement by Leimer and Edlund.

A conundrum was discussed with regard to the needs of small businesses where checks still prevail and the need for branches. King believed that we will see significant attention paid to mobile payments for businesses in the next couple years, while I added that tablet apps for business are also being developed to respond to the needs of the business community. NFC was also seen as a game changer with regard to the need for branches for small businesses. Bob Williams (@bob_williams) from Harland Clarke believed that, while check usage is definitely dropping, there are much greater efficiencies today than in the past with RDC and other electronic tools.

It was clear from the Intuit research that was just released, the Bank 2020 research released in April, and the discussion during the Twitter Town Hall today that there is significant disruption in the banking industry with regards to channel support and device utilization. The consumer movement to new banking channels is mirroring the movement to more sophisticated devices such as smartphones and tablets. Many consumers are NOT choosing one device or channel over another, but are using multiple devices depending on their personal needs.

Consumer desire for an integrated banking experience without friction will need to be supported by banking organizations in the future. Distribution networks (whether tangible or intangible) will need to support an expanding array of capabilities that may include integration within retail or social sites as opposed to standing alone.

As I stated to the participants of the Twitter Town Hall at the end of today’s discussion, “If banks are not prepared for the channel migration that is already underway, they may experience the impact of ‘Bank Transfer Decade’”.

Note: A summary of the findings of Intuit Financial Services’ 4th Annual Financial Management Survey and recently released related research is available in my previous Bank Marketing Strategy blog post.

If you weren’t able to join us, what are your thoughts around the impact of channel shift away from the branches and towards other media? Will we see the elimination of branches completely? Will another device or technology unseat smartphones and tablets?

Leave us a comment below, or Tweet at the author @JimMarous.

Consumers Are Increasingly Using Multiple Devices to Support Banking Needs

*This blog was originally posted on Bank Marketing Strategy by Jim Marous. Jim is a marketing services leader focused on building strategic solutions for the financial services industry. You can follow him on Twitter @JimMarous or connect on LinkedIn.

Traditional bricks and mortar facilities are being visited less as the use and importance of online and mobile devices continues to increase according to Intuit Financial Services’ 4th Annual Financial Management Survey released yesterday. According to the survey, while a large percentage of consumers still manage their finances offline (45%), the percentage of consumers using online services from their financial institution has continued to increase annually; increasing 11% since 2009 to 38% in 2011.

The main reason consumers said that they don’t visit their bank branch as often as they used to is because they are visiting their FI’s website and use their online banking tools (76%). These online banking tools are so important that one-third (33%) said they would switch their relationship to another institution if there were better online tools offered elsewhere.

The importance of online tools was reinforced by Brett King, author of the bestseller Bank 2.0 and founder of direct mobile banking start-up Movenbank at this year’s BAI Retail Delivery Conference in Chicago. “Banking is quickly changing from a place you go to something you do everyday,” stated King. He provided a chart from the American Bankers Association and Nielsen Research that illustrated the channel migration occurring today and projected in the future.

 

Source: ABA, Nielsen Research

It appears that the growth of mobile banking is only limited by the growth of ownership of a smartphone according to the Intuit study. Forty-one percent of all respondents indicated ownership of a smartphone, 23% said they used a mobile banking solution, and an additional 17% intend to try mobile banking in 2012. The primary reason consumers indicated that they do not use mobile banking was because they do not own a smartphone (25%) followed by the fact that they prefer to bank online (22%).

These findings are similar to the findings last week from comScore that drew a correlation between mobile banking and smartphone adoption. “The investments in mobile made by financial service institutions, along with the continued growth in smartphone adoption, have had a positive effect on the use of mobile financial services,” states Sarah Lenart comScore vice president for marketing solutions.

As expected, the adoption rate of mobile banking is demographically skewed. Young adults (aged 18-32) are three times more likely to carry their bank in their pocket, compared to Gen X, baby boomers or seniors. And while 65% of mobile banking users access their accounts through the internet/Web, 28% use a mobile application. “Regardless of age, each customer expects to connect to their financial institution in their own way,” said CeCe Morken, president and general manager of Intuit Financial Services.

In another Intuit study of more than 50,000 mobile banking customers, it was found that consumers tend to interact with their financial institution 45% more often if they use a combination of both mobile and online tools. These customer also tended to have larger relationships and a better retention rate.

“While we anticipate that there will be some mobile-only consumers, most people will be using multiple devices on any given day in the future,” said Intuit spokesperson Tobin Lee in a conversation yesterday. “Financial institutions must be prepared to deliver financial information and insights across multiple devices (PC, phone, tablet), optimized to the merits of each device it they are going to meet customer’s needs. If they don’t, someone else will . . . probably displacing a bank’s relationship.”

The desire for ‘anywhere app access’ is also supported by a just released study from Oracle entitled, Opportunity Calling: The Future of Mobile Communications – Part Two which found that while there was a stronger preference to use a tablet for mobile banking (34%) compared to a mobile phone (11%), the majority of consumers (55%) would prefer to use both devices. This is important to prepare for since the same study found that almost 30% of the U.S. mobile customers that do not already have a tablet device plan to purchase one in the next 12 months. These findings were also reinforced in last April’s, Intuit 2020 Report: The Future of Financial Services.

As customers continue to use multiple channels to connect with their bank, it will be increasingly important to have a 360-degree view of customer device touch points and to leverage the advantages of each device to provide an optimum customer experience. The current anxiety over online and mobile security needs to be addressed at the same time as innovations such as near field communication (NFC) and location based services get integrated into online and mobile solutions. Bankers will need to get ahead of the payments innovation curve and prepare for major distribution channel disruption. In short, banks will need to do a paradigm shift by becoming nimble at a time of increased regulation and consumer scrutiny.

Are today’s banks prepared for the massive changes ahead? Or will new online organizations such as Ally, BankSimple, Movenbank and others steal the hearts and wallets of Gen Y and device savvy consumers?

Leave us a comment below, or Tweet at the author @JimMarous.

Online Banking Ranks #1 With Consumers

An increasingly digital lifestyle has left most consumers conducting banking tasks outside of the traditional brick and mortar branch, whether via a mobile device or online banking. Intuit Financial Services’ 4th Annual Financial Management Survey echoed this sentiment as 27 percent of respondents said they only physically go into their bank or credit union once a month, excluding ATM visits.

Correlating with fewer branch visits, the percentage of consumers using online services provided by their bank or credit union continues to increase year-over-year; up 11 percentage points since 2009 to 38 percent in 2011. Not only are consumers utilizing online banking at a faster rate, they are placing a stronger emphasis on these tools. One-third of respondents said they would switch financial institutions for better online banking tools, showing the growing need for financial intuitions to provide a strong online suite of tools to customers and members.

Are you seeing a decrease in branch visits at your FI? Are your customers and members beginning to utilize online banking tools at a faster rate? Let us know in the comments section below, or Tweet @Bankingdotcom.

Nearly One Quarter of Americans Utilize Mobile Banking

Mobile continues to grow in popularity as consumers embrace a lifestyle that allows them to be connected on-the-go. For consumers using a smartphone with Internet browsing capabilities and apps, the possibilities to connect are endless. You can now pay bills, shop, peruse apartment listings and apply for jobs from the palm of your hand.

Intuit Financial Services’ 4th Annual Financial Management Survey found nearly one quarter (23 percent) of consumers are using a mobile device for banking needs and an additional 17 percent plan to try mobile banking in 2012. Of the respondents who use mobile banking, 65 percent access their bank or credit union account through the Web/Internet, while a little more than one quarter (28 percent) use a mobile application.

Similar to findings reported earlier this week from comScore, it is clear mobile banking adoption is directly linked to Smartphone adoption. Analyst firm IDC mentioned they have been predicting that smart phone growth in 2012 would exceed the feature phone, noting “in addition to more people having smart phones, banks’ awareness campaigns have also helped drive mobile banking adoption.”

Do you use a smartphone to access mobile banking? If so, do you use the Web/Internet or an app provided by your bank or credit union? If you’re an FI, how have you been driving mobile banking adoption? Let us know in the comments section below, or Tweet @bankingdotcom.

Will Bank Transfer Day Prevail?

As news rolls in regarding rising debit fees, numerous consumers across the country are voicing their opinions and putting their money where their mouth is. Encouraged by movements such as Occupy Wall Street and Bank Transfer Day on November 5th, bank customers are re-evaluating how and where they manage their money. So how are consumers really reacting? Intuit Financial Services’ 4th Annual Financial Management Survey polled 1,000 consumers in October to get a pulse on consumer’s attitudes. Below is a graphic outlining the findings:

Are you a loyal FI member, or do you plan to switch due to new fees? If you work at an FI, what are you doing to deepen relationships? Are you planning to charge new service fees?  Let us know by Tweeting @bankingdotcom or leaving a comment below.

Banking.com to Host Twitter Town Hall on November 3rd

In conjunction with Intuit Financial Services’ 4th Annual Financial Management Survey, which will be released next week, we’re hosting a Twitter Town Hall on Thursday, November 3rd. The Twitter Town Hall will discuss the survey results and how they tie into current banking trends, including mobile banking adoption, consumer attitudes, what consumers are looking for in online banking tools, customer loyalty and more.

The Twitter Town Hall is open for all our readers to join and participate in the conversation. To join us and/or learn more about the event, see below

Steps to Join:

  • Twitter Town Hall: Go to www.tweetchat.com. Log in using your Twitter ID.
  • Enter the hashtag to join the conversation: #IFSsurvey

Details:

  • Date: Thursday, November 3rd
  • Time: 10:00 am PST/1:00 pm EST
  • Hosted by: Banking.com Staff (@bankingdotcom) and Al Ko, Senior Vice President of Consumer Solutions for Intuit Financial Services (@financeworks)

If you are planning on attending the Twitter Town Hall and interested in receiving the key findings of the survey in advance, please email the Banking.com editors at info@banking2020.com. Additionally, if you are interested in submitting a question prior to the Twitter Town Hall, DM us on Twitter.

We hope to “Tweet” with you on November 3rd!