Home News How Smartphones Dialed in on Digital Banking Switch

How Smartphones Dialed in on Digital Banking Switch

by Renay San Miguel

Call it the Goldilocks effect on mobile device use: Most of us think other people spend too much time on their smartphones. But our own usage? It’s juuuust right.

That finding, and more evidence that younger demographic groups are leading the charge toward a digital future for banking/financial services, are among the highlights of a recent survey on mobile device usage by Bank of America.

Earlier this spring, the company surveyed 1,004 U.S. smartphone owners who also have checking/savings accounts. While the survey broke down the results into the usual demographic categories  – millennials, Generation X, baby boomers and seniors – BOA also segmented the millennial findings into older (ages 25-34) and younger (18-24) subgroups.

The survey addressed overall behavioral impact of mobile devices, such as using a smartphone to get out of a blind date, for example, or comparing time spent with smartphone vs. time spent with family members. But the BOA study was also designed to gauge the impact of digital banking trends.

Hari Gopalkrishnan“It is true that millennials find this stuff a lot more native and sort of their bread and butter,” said Hari Gopalkrishnan, managing director of client-facing platforms technology for Bank of America. He added, however, that new biometric user experiences for banking services on mobile devices are actually finding more receptive audiences among baby boomers and seniors.

“Whole generations, including my parents, passed by the desktop side of things. When iPads and tablets came out, it was a more accessible medium. When you think of passwords on a small screen on a smartphone, for someone older it’s harder,” Gopalkrishnan said. “You introduce fingerprints and touch ID, and the older demographic is starting to quite extensively use our digital capabilities.”

The Trends in Consumer Mobility report has these findings:

  • 17 percent of those surveyed don’t think they’re on their smartphones too much, but 56 percent think other people are too obsessed with the devices.
  • When it comes to mobile manners – that is, answering texts and emails in a timely manner – the “not me!” attitude is again apparent: 55 percent of respondents believe they mind their mobile manners while they believe only 18 percent of others do.
  • 62 percent of those surveyed do their banking digitally, compared to 51 percent last year. Millennials and Gen X lead the way in this category with 68 and 70 percent, respectively.
  • 54 percent of respondents say they use a mobile app for their banking, up from 48 percent in 2015. 80 percent check their banking app at least once a week.
  • 40 percent are either using or would use their smartphone to buy things at checkout. Again, millennials are ahead in their use of mobile wallets with 57 percent usage.
  • 57 percent are either using or would use a peer-to-peer digital payment system from their bank, with older millennials clocking in at 77 percent in this category.

“These are no longer cool things for customers. They’re now part of the fundamental table stake offerings,” Gopalkrishnan said. “The more we see customers adopting and embracing and saying ‘yes, this is good, I don’t need to go to the (banking) branch,’ they start to expect more from their digital provider.”

BOA’s mobile customers now number at 20 million, he added, thanks to conveniences that get rid of the need to phone call centers or visit bank branches. For example, once the ability to order new checks was added to the bank’s mobile platform, “we had a tremendous uptick in mobile usage.”

The BOA report mirrors the growth in mobile banking found in a Federal Reserve study conducted in November of last year. The Fed surveyed 2,500 smartphone users with bank accounts and found that 43 percent had used mobile banking services, an increase from 39 percent in 2014. In that survey, millennials and Gen X users also showed much more acceptance of banking apps than baby boomers and seniors with 67 percent and 58 percent usage, respectively. ECS Commissioned Photography 24th Street Loft Lifestyle New YorkThe behavioral aspects of the BOA study, such as time spent on devices, perceptions of mobile manners and comfort levels with texting and emoji usage, can shed insight into digital banking trends like paying friends/family via text that are heading our way, Gopalkrishnan said. “If you can text videos and pictures, why would you turn around and say, ‘here, let me give you a physical check?'”

It’s also about the trust people put in their mobile devices, and how companies like Bank of America have to weave that into their digital strategies. For example, the survey found that more people are using their smartphones to record major life events. “We have to take that trust very seriously,” he said. “We have to provide capabilities, and we have to provide the ability to opt in to a wide range of capabilities. You have to listen to customers. When we think of features, we have 100 ideas and we have to distill them into the five or ten things we really want to go after.”

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