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(From CU Times) – Compared to other people, millennials are relatively unattached to their financial institutions and they’re much more likely to care about a financial institution’s technology than about its in-person service, according to recent research from Oakland, Calif.-based payments firm Marqeta.
The company’s survey of 2,027 people in the U.S., UK, France, Germany and Spain found that only 17% of people 18-34 years old in the United States said they couldn’t imagine ever wanting to change banks. However, almost half (49%) of all respondents said they would consider switching to a digital-only financial institution, and 44% said they would consider switching to a banking service offered by Facebook, Google or Amazon if they were to enter the market. That number was 46% for Americans. However, 40% of the respondents overall said the biggest reason they don’t change banks is that “it seemed like too much work or they wouldn’t know where to start.”
“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,” Marqeta noted. “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.”
Generational Divide in Service Priorities
American millennials have different priorities for financial institution offerings than older generations do, according to the data. Specifically, they were twice as likely as baby boomers to say that a mobile app was the most important FI benefit. Baby boomers, on the other hand, were twice as likely as millennials to say that an in-person presence was the most important benefit.
In addition, over half of millennials in the survey (53%) said they have made a purchase with a mobile wallet, and 55% said they were comfortable using TouchID and FaceID to authorize payments. About a quarter (24%) of millennials used Apple Pay, and 21% had used Google Pay. Only 8% of baby boomers had used either of those things.
Millennials were also twice as likely as baby boomers to have sent or received money via a P2P service (e.g., Venmo) and were more likely to pay someone back using P2P services than to use cash or a check.
The study found that 42% of baby boomers had written a check for something other than rent or utilities in the last month, but 48% of millennials couldn’t remember the last time they wrote a check for something other than those things.
Payment Habits Affecting Brand Perception
Ease of payment is correlated with how members feel about a brand, according to the study. Three-quarters (75%) of the respondents said a smooth payment experience made them feel more positively toward a brand, and 40% said they were more likely to shop with a retailer again if they don’t have to re-enter their payment information.
That could have significant ramifications for merchants and card issuers, especially given that half of the survey respondents also said they thought cash will disappear completely at some point in the future.
Almost three-quarters (71%) believed a completely cashless society would require privacy sacrifices, however, and half of the respondents said they have paid cash for the express purpose of not leaving a record of what they bought.