May 30, 2018 Philip Burgess
At 56 million, millennials represent the largest generation in today's workforce, according to analysis from the Pew Research Center. Their sheer size affords them a tremendous amount of spending power and influence in the consumer market.
Nipping at 18- to 35-year-olds' heels is Generation Z, many of whom are young adults, ready to enter the workforce if they haven't already.
With millennials having analog childhoods and digital teen years, it's little wonder they're among the chief users of online mobile banking technology. But mobile banking has been available for Generation Z members' entire lifetimes, a fact that's evidencing itself in their sweeping adoption of mobile banking services, according to the results of a newly released survey.
More than 2 in 3 Generation Z Americans have an account open with a financial institution, according to recent analysis conducted by Raddon, an affiliate of Fiserv, Inc. Of these, 37 percent express partiality to digital or electronic banking services. This compares to 34 percent of Generation Zers who prefer banking the old-fashioned way.
Bill Handel, Raddon vice president of research, indicated that the people born in the mid-1990s and early 2000s are the newest entrants into the consumer marketplace, so it's important for businesses to tap into their interests and expectations.
"Gen Z will soon step into the spotlight as they begin to enter adulthood and take on the financial responsibility it brings," explained Handel. "By taking the time to better understand this generation's priorities and preferences for moving and managing money, financial service providers have an opportunity to establish relationships that will last a lifetime."
The financial savvy of Generation Zers may be a product of their schooling, as more than a dozen states - 17 overall, according to the Council for Economic Education - require high school students to take coursework that teaches personal finances. This comes as good news to the lion's share of Americans, as 93 percent of 45- to 60-year-olds believe personal finance ought to be mandated curriculum for high schoolers, based on survey research done by Equifax.
Generation Z still go to bank branches
Even though online banking is their preferred banking route, Generation Z isn't entirely abandoning brick-and-mortar financial institutions. Based on a separate poll performed by Accenture, 23 percent of Generation Zers pay a visit to their bank branch at least weekly. That's more than the overall average, or 20 percent of Americans who stop at bank branches four times per month or more.
"Almost 70% of Generation Z uses online banking weekly."
Nevertheless,Generation Zers opt for online banking when it's available, with 69 percent logging on to their mobile accounts once or more per week, Accenture found from the analysis.
Michael Abbott, managing director of financial services at Accenture, noted there's a place at the table for both branches and online banking carriers.
"Clearly, Gen Z consumers prefer to manage their money on mobile devices, but they still need branches to digitize their earnings," said Abbott. "Banks should treat this branch relationship as a near-term opportunity to deepen their ties with Gen Z consumers - offering financial education as their needs grow."
Abbott further stated mobile payment and online banking services are clearly here to stay, as robust demand shows no signs of slowing. At a bare minimum, nearly 45 percent of Generation Z thinks technology will supplement traditional banking services for the foreseeable future, based on Raddon's research. This compared to 37 percent of millennials who felt similarly.
Of course, online banking institutions don't want to confine their appeal to one specific generation; they want to appease the likes, interests and needs of everyone. In light of this, mobile banking service companies shouldn't neglect what they're known for - providing swift services.
Millennials walk when mobile banking isn't speedy
This is particularly true for millennials, 47 percent of whom use online banking, according to survey research done by Jumio and Javelin Strategy & Research. However, when mobile banking technologies fail to deliver due to the process taking too long, 43 percent of millennials say they've abandoned actions related to internet-based activities, like deposits, withdrawals or other similar transactions. This compared to 25 percent of Generation X who failed to finish due to mobile banking hiccups.
Accenture's Abbott stressed consumers' demand for speedy services will ultimately force traditional banks to think outside the box in order to improve their services and remain competitive.
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