Online banking has become the preferred way for North American consumers to access their banking services, with two-thirds (65 percent) using online banking at least weekly, according to a new Accenture study.
Based on a survey of 1,500 consumers in the U.S. and Canada, the study, “10 Mega Trends Driving the Future of Payments,” identifies consumers’ banking and payments behaviors, their appetite for next-generation payments products and experiences, and the trends most likely to drive significant change in the payments industry in the near- and long-term.
The study also found that the one exception is Gen Z consumers, as more than two-thirds (69 percent) of this group prefer to bank via a mobile app, making mobile the preferred banking channel for today’s youngest consumers.
As far as bank branch visits, Gen Z consumers are surprisingly more likely than any other age group, including Baby Boomers, to visit one at least weekly.
Among the key findings: One in five consumers (20 percent) visit their bank branch at least weekly, with nearly one-quarter (23 percent) of Gen Z — more than any other age cohort — accessing banking services through a branch at least weekly, compared with only 16 percent of Baby Boomers. Generation Z is also the most likely to use cash when making an in-store purchase, with 28 percent preferring cash, compared to only 18 percent of millennials.
“For college-age consumers whose first jobs tend to be cash-based, branch usage is more a necessity than a choice,” said Michael Abbott, a managing director in Accenture’s Financial Services practice, in a release on the study. “Clearly, Gen Z consumers prefer to manage their money on mobile devices, but they still need branches to digitize their earnings. Banks should treat this branch relationship as a near-term opportunity to deepen their ties with Gen Z consumers — offering financial education as their needs grow. But banks should also look at those habits as a clear sign of long-term demand for cashless mobile payment services.”
The survey also found payments use remained consistent during the past three years, aside from an increase in debit cards and mobile wallet apps aligned to retailers, such as Starbucks.
Nearly two-thirds (63 percent) of consumers said they use a debit card for payment at least weekly, up from 53 percent in 2014 — and closing the gap with cash, the most frequently used payment method, which remained flat from 2014, at 66 percent. Mobile wallet use was flat in all areas, except for retailer apps, which increased 4 percentage points over the past year, from 16 percent in 2016 to 20 percent in 2017. All other mobile wallet app use remained flat at around 14 percent, with no distinct preference between types of wallets — whether provided by credit card companies, tech giants or traditional banks.
“Younger consumers are demanding an exceptional digital payments experience on all platforms — most importantly on their smartphones — and want to be compensated through targeted rewards, offers and discounts, at a cut-throat rate,” Abbott said. “These younger consumers will ultimately force traditional banks and payments players to either think beyond the functional aspect of mobile payment apps and create an engaging customer experience, or risk getting squeezed out of the process.”