Currently, most conventional banks offer digital services, and the government promotes using cashless transactions in daily life, particularly during pandemics when people are more concerned with avoiding physical contact. There is a growing trend toward creating digital-only banks, which are entirely virtual financial institutions without separate physical branches and conduct all digital banking operations through mobile applications. Individuals’ experiences with the service change with completely virtual functions, impacting their spending and financial routines.
Mobile banking customers can use a banking app on a smartphone or tablet to access their current accounts. However, for older generations, mobile banking might seem an unnecessary departure from more established banking practices like calling a bank and physically visiting a branch. On the other hand, millennials have quickly adapted to this more contemporary banking method; currently, over 47% of millennials actively use mobile banking apps.
So why do millennials and gen-Zs find mobile banking appealing?
Using a mobile phone is ingrained in the culture of the majority of millennials & gen-Zs. They can contact friends and family, plan every detail of a busy life, and more with just a few taps of a button. In the current digital era, mobile banking is an effective and time-saving alternative to more traditional banking methods that can fit around any commitments or schedule. Managing your finances whenever you want without going to a bank branch or waiting for customer service centres to open makes this type of banking convenient for most people.
According to research, 83% of millennials said they would open and switch bank account for more benefits like better interest rates, cashback rewards on purchases, or refunds on ATM withdrawal fees. However, additional features included in mobile banking apps, such as the ability to check your balance without logging in, split costs with friends, and get immediate assistance and advice without leaving the app, are also attractive to millennials.
You can access your most recent balance and spending history anywhere, anytime, with a mobile banking app (as long as you have WiFi or mobile data). You can transfer money, repay your friends and family quickly, and view your spending patterns when necessary. With the help of mobile banking apps, you can now see your balance and how much money you have left to spend in full transparency, which was previously only possible by going to a bank branch or ATM.
Each month’s budgeting can be a challenging task. Mobile banking apps let you specify your savings objectives and make deposits whenever possible. Newer banking apps allow you to save money in envelopes or pots separate from your principal account balance, acting as a virtual piggy bank to keep you from being tempted to spend it. However, depending on your account type, your savings are always accessible if you need to transfer funds back to your current account should you need to access your money quickly (or want to treat yourself!).
Many mobile banking apps replace a simple username and password login with more sophisticated security features. Two-factor authentication requires at least two pieces of information to confirm your identity before you can use the app. Some mobile banking platforms offer additional security features like biometric fingerprinting and facial recognition software.
Banks have more incentive to invest in new technology now that Generation Z is beginning to use banking services like money transfers or bank balance check. Mobile banking platforms will need to quickly adapt as new technology develops to meet the needs of this generation.