Age Doesn’t Matter in Mobile Banking, Study Finds

A recent study of 2.5 million online banking customers by Intuit Financial Services found that older customers behave no differently than younger customers in the mobile banking environment.

Another important conclusion from the study was that mobile customers save — and earn — banks money.

It’s well known that younger customers, particularly Gen Y customers, are the fastest adopters of mobile banking technology, and Intuit’s study supports that conclusion.

“For younger customers,” says Russell Lester, director of analytics for Intuit Financial Services, “technology is front and center. There is no need for financial institutions to reach out to them with new services.”

Instead, younger customers seek out financial institutions that offer the services they want.

With boomers and seniors, it’s a different story. Take a service such as mobile remote deposit capture (RDC). With older consumers, particularly seniors, awareness  –- as in, “How do I get this service and how does it work?” — and security are the most important impediments to adoption. Lester told Bank Innovation that financial institutions need to adjust their marketing to appeal to an older demographic by addressing these concerns.

However, once they become active mobile users, older customers log into their accounts as often and spend as much time using mobile banking as younger customers.

“Touches are driven by paying bills and PFM, checking financial health,” he said, “so the needs of young and old customers is not different in terms of touches.”

But do older customers want to bank on their smartphones and tablets?

“The value proposition of mobile RDC, for example, is the same for older and younger customers,” Lester said. “Speed and convenience.”

Another conclusion of the Intuit study is that more touches and longer touches are good things for banks. Lester puts it plainly: “The more customers engage in the digital banking channel, the more profitable they are.”

About 40% of active online banking customers also use the mobile channel, according to Intuit.

The Intuit study shows that increased time spent in digital banking channels translates directly to higher retention rates and higher account ownership of multiple financial products, both wins for financial institutions. “Time spent on the site tends to correlate with investment in the brand.”

(Here at Bank Innovation, we have long argued and blogged about this ROI of innovation channels.)

Lester said that users spent 38 minutes on average on their bank’s website, more than twice the amount of time spent on, for example, LinkedIn.

“That’s a lot of mindshare,” Lester said.

A commonly cited challenge for mobile is its purported inability to facilitate the cross selling of financial products. But Lester doesn’t see it that way. “When a user adopts a new service, such as mobile RDC, that is a cross-sell,” he said.

Why is using a free service, such as mobile RDC, considered cross-selling? Because use of mobile products leads to savings for banks.

“The cost of a mobile RDC transaction is 10% of a conventional check deposit at a branch, $0.40 versus $4.00,” Lester said. “Digital banking has matured to the point where it can handle most transactions end-to-end, and the branch is more specialized, for items like mortgages.”

There are profound implications for bank marketers.

“Our study helps our customers prioritize where they invest,” he said. “What will their focus be? Who do they want to attract? The same benefits of early adopters are true for older customers, so marketing efforts should diversify — promotions should be geared toward older generations.”