Digital natives: Bridging the banking age gap


By Howard Berg, senior vice president, Gemalto

In recent years the mobile has become integral to our everyday lives. It’s our main source of communication with the wider world but it’s also much more, as we use it for entertainment, directions and now, payments.

Driven by broadband penetration during the 2000s and mobile internet in the 2010s, it could be argued that banking has been the most affected vertical industry with this mobile growth.

Time to react

According to the UK’s Office of National Statistics, half of all adults and specifically more than three quarters of 25 to 34 year olds now manage their money online and banks have needed to react and adapt their services in light to this.

These figures are certainly progressive but they only analyse the usage trends of over 18s, with no specific insights into the behaviours of teenagers and younger, those that are ‘born digitals’ and crucially, the future wave of customers. It’s imperative for the banks to see how these people who have grown up with digital services view mobile banking, as it could be the key differentiator between them choosing one bank over another.

With smart mobile devices playing such a leading role in young people’s everyday lives, it makes sense that banking habits are changing to follow suit. According to recent Gemalto research, accessing banking services either online or via an app is already seen as “essential” for a quarter (24.2%) of young consumers. Convenience undoubtedly plays a large part in this as their funds are accessible at any time, but there are other factors at play.

Although they have truly embraced mobile devices and m-banking, it would be wrong to assume young people are aware of the risks when it comes to security. Many seem concerned about the risks they face when using a mobile banking app however, the need for an easy to use service outweighs their fears and willingness to do anything about it. There needs to be a balance.

For example, recent findings from Gemalto research showed one in three respondents would be happy to access online or mobile banking services via public Wi-Fi services. This is an easy and convenient way for young people to access their banking details, but they could be at risk in case of an unsecure connection. It’s therefore important for banks to make sure they have security solutions in place to face the growing demand of mobile banking.

Fully featured service

When looking to the quality of mobile banking, young people want a fully featured service with access to all the functions they have come to expect from the online or in-branch experience. In a world where the pace, quality and intuitive nature of apps have been defined by innovative, agile consumer technology companies, such as Google, YouTube Facebook, Spotify and Twitter, financial services companies still need to work hard to catch up.

Security cannot be an after-thought when designing an app, it must be included in the discussion and built in from the start to ensure a positive user experience; whilst ensuring compliance needs are also being met.

Non-traditional financial services companies such as Apple, PayPal and Google are entering the financial services space and blowing the market wide open, and you have a market context in which financial services institutions need to be much more proactive about engaging with their customers, particularly the digital natives.

Banks should be using the mobile channel to cost-effectively engage and deliver product offers and general content to the right customers at the right time, driving organic growth and customer retention, and ultimately increasing revenue.

This can come in various forms from dynamic messaging programmes to deliver “tappable” tailored offers and content, to the pre-login mobile apps screen, to contextual messages to customers based on their profile, activities and attributes. Mobile can also been used to engage people in non-sales experiences as well, for example, messages about digital fraud prevention or value-added content such as guides for first-time homebuyers or parents.

All about the mobile

We’re now at a stage where younger generations don’t know anything other than using their mobile phone; it’s just natural. As young consumers become have become so entrenched in using mobiles to access an almost infinite amount of services, the demand for convenient and intuitive mobile banking services will grow with it.

Mobile technologies are now extremely influential and this trend isn’t going anywhere. Across the UK, and globally, financial institutions must understand this importance and drive their offering beyond just apps, delivering a user friendly feature service. By prioritising security with convenience, banks can offer the best possible user experience, for both young and old.

Gemalto is a world leader in digital security, with 2014 annual revenues of Euro 2.5 billion and bluechip customers in over 180 countries.


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