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Younger Folks Take Interest in Branchless Banking Alternatives

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May 28, 2014

Younger Folks Take Interest in Branchless Banking Alternatives

By Steve Anderson
Contributing TMCnet Writer

It's something of a cliché that younger people are more technologically-savvy than the older equivalent, and this particular cliché doesn't exist in isolation. It's no surprise that younger folks are interested in greater technology and more change, and that particular cliché got just a little more proof from a recent set of reports released from Accenture (News - Alert) that show the young interested in big technology changes in banking.

The Accenture reports—titled “The Digital Disruption in Banking: Demons, Demands, and Dividends” and “The Everyday Bank: A New Vision for the Banking Age”--showed that 39 percent of younger banking customers—age 18 to 34—would consider switching to branchless banking, as compared to 29 percent of customers age 35 to 55 and just 16 percent of customers over 55. Additionally, should major technology firms start offering banking services, the young would deal with said firms at almost the same rate compared to older people.

The numbers were telling; for those aged 18 to 34, 40 percent would consider banking with Google, should Google offer such services, while 37 percent would do likewise with Amazon, and 34 percent for Apple (News - Alert). The farther up the age ranks go, the less likely tech firms could do banking business: for the 35 to 55 sector, customers would turn to Google 23 percent of the time, Amazon 23 percent, and 20 percent for Apple, while for those over 55, the numbers are catastrophically lower: five percent Google (News - Alert), seven percent Amazon, and six percent Apple. For the 18 to 34 set, 72 percent of respondents were either “likely” or “very likely” to do banking business with a firm that had already received some of that business on another front, like a shipping company or a retail firm. Respondents 35 to 55 would do likewise 55 percent of the time, but only 27 percent of those over 55 could say likewise.

Younger customers also seem to have an interest in more services from a bank. 55 percent of 18 to 34 year olds had an interest in the bank helping with the car buying process, as compared to 45 percent of 35 to 55 year olds and 24 percent of those over 55. A similar pattern emerged for home buying, with 57 percent of 18 to 34, 47 percent of 35 to 55, and 24 percent of over 55 looking for help from banks. Real-time analysis of spending was also a plus for the younger, especially for “safe-to-spend” forecasts; 68 percent of 18 to 34 were interested, while 55 percent of 35 to 55 and 24 percent over 55 joined in.

The differences are rather stark, and split quite clearly along age lines. But one clear takeaway is that Google Bank will likely be starting up fairly quickly; the younger market is coming into its own as the new consumer superpower, and failing to offer up what that market wants is a huge loss in opportunity cost. Meanwhile, the older folks—those who likely grew up with tales of the Great Depression—are less inclined to bank away from the physical, and not with firms that just added banking services.

Knowing the market is the first step to success in that market, and the figures from Accenture make it quite clear; the younger market wants more technology in banking, the older, less so. So being prepared for that change now when the younger people become older is going to be a move that likely pays off in the long run.

Edited by Maurice Nagle

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