The relationship between consumers and their banks is in a period of dramatic upheaval brought on by the rapid pace of technological innovation. Bricks-and-mortar banks are losing relevance among consumers — particularly millennials.
Fifty per cent of North Americans say they would be likely to bank with tech start-up Square should the company offer a banking service, for example.
In a new report from BI Intelligence, we analyse how consumer banking habits have changed, how its affected retail banks and we explore a number of things banks can do to stay ahead of the curve.
Here are some of the key elements from the report:
- Worldwide, mobile banking is now more popular with bank customers than visiting brick-and-mortar branches. Fifty-seven per cent of customers do their banking online on a weekly basis, while nearly one-fourth use mobile banking weekly (up 9 percentage points from 2013). Only 14% visit a bank branch every week. Mobile is completely changing the customer-bank relationship. (See chart, above.)
- At the top three banks in the United States, about half of all online customers also use mobile banking. Now that active mobile banking users have reached about 50% of online customers, growth in adoption is slowing, following typical tech adoption trends.
Large retail banks have a lot at stake as they try to court mobile-centric millennials in particular. The next generation of banking consumers is less satisfied with its banks than older age groups and is willing to bank with non-traditional financial institutions.
- Offering mobile services like mobile check deposits is the minimum banks can do to stay on the cutting edge of the revolution in banking and attract tech-savvy customers. There are also opportunities in payments in the form of mobile wallets, wearables, peer-to-peer payments, and international remittances.
In full, the report:
- Analyses the retail banking market (9 charts).
- Explores how consumer banking behaviour has changed in the digital era (8 charts).
- Forecasts mobile banking investment through 2018 (2 chart).
- Gives examples of four types of services that banks could offer to stay ahead in mobile (4 charts).
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