In an increasingly mobile and always-connected economy, we’ve seen an explosion in new payments technologies and consumer options in recent years, which is having a broad impact on what people are looking for and expecting from their banks.
In this new era of banking and finance, companies need to be innovative about how they solve complex problems for an increasingly diverse set of customer preferences.
Motivated by a desire to understand how consumer attitudes are changing against this rapidly evolving landscape, in January Marqeta surveyed 2,022 people from across the world (1,200 in USA, 500 in the United Kingdom, 100 in each of France, Germany, and Spain) using Propeller Insights to field our survey questions.
While the broad hype has been that cash will eventually disappear, our respondents weren’t entirely bought in on that. But they were uneasy about how they would be impacted in a more cashless society. People were split exactly 50–50 on whether they thought cash would disappear completely from society, while 71% thought that there would be privacy tradeoffs in a cashless society.
Our international panel was clear though, that as we engage in the economy through more mobile and electronic payment technology, payments have become a crucial new consumer touchpoint: three-quarters of all respondents said that a smooth payment experience made them feel more positively about a brand, while 40% said they’re more likely to re-frequent a retailer if they don’t have to re-enter their payment information.
Marqeta’s survey showed us that these broader, bigger picture trends are driving forward banking preferences and payment technologies at a rapid pace.
As cash use decreases, greater importance is being placed on the need for simple-to-use technology.
- When asked to list the most important benefits their bank provided them, significantly more people listed a user-friendly mobile application (23%) than an in-person presence (13%).
- People were most enthused about a bank offering them easy access to ATMs and low ATM fees: 30% credited this as the most important benefit.
- UK respondents were significantly less engaged in traditional banking behaviors than the US: they were 29 percent more likely to credit a user-friendly mobile app as their most important bank feature (27% v 21%) and 60 percent less likely to have written a cheque in the last month for something other than utilities or rent (13% v 32%).
People are opening up to changing their banks, and to the prospect of new entrants in the banking market.
- People had no firm commitment to their bank. Only 21% said they couldn’t imagine ever wanting to change.
- Millennials (18–34 years old), were much less attached to their traditional banking brands. Only 17% of American Millennials and 14% of UK Millennials said they couldn’t imagine ever wanting to change banks.
- Almost half (49%) of all people said that they would consider switching their banking business to a digital-only bank, while 44% said they would consider switch to a Facebook, Amazon or Google bank, should they enter the market.
- More people would change their bank, it just seems a little… exhausting: 40% said the primary factors stopping them from changing was that it seemed like too much work or they wouldn’t know where to start.
Millennials are Driving Change in the Market, and are Deeply Entrenched With New Digital Banking and Finance Tools
- More than half of Millennials (18–34 years old) in the US and UK have used mobile wallets to complete a purchase in-store or on their mobile phone. (More than double the amount of Baby Boomers (51–65 years old) who said the same.)
- More than half of Millennials in the US and UK are comfortable using TouchID and FaceID to authorize mobile wallet payments. (Almost double the amount of Baby Boomer who said the same.)
- Millennials in the US and the UK were more than twice as likely than a Baby Boomer to pay someone back using a peer-to-peer banking app like Cash App and Venmo than a physical currency like cash or check.
As our survey found, a paradigm shift in recent years in the technology we use to interact and engage with the economy has fed into a generational shift in regards to how younger people bank, which isn’t going to reverse itself.
New digital banking options and fintech tools are here to stay and as comfort levels grow, this market is going to continue to explode right open.