Put the X factor back into generation Y banking

In my previous blog, I discussed the current hype surrounding mobile banking and how a fundamental step change in consumer behaviour means that mobile financial services is undoubtedly  more than just a fad. At the same time, there are also those consumers who have grown up with all things digital and don’t know any other way to behave. I’m referring to the growing breed of generation Y consumers and ‘digital natives’ such as those two year olds you see on the train navigating an iPad better than they can put pen to paper!

These digital natives are the next generation of banking customers and so financial service providers cannot underestimate just how relevant the mobile channel is, or will become, to them. According to Ofcom, nearly half of all teens now own a smartphone compared to over a quarter of adults. Of these teens, 60% are ‘highly addicted’ to their smartphones. Overall, smartphone penetration has now reached 40% of the population.

Furthermore, a recent study by Efma has found that mobile banking and social media are both key to financial institutions engaging effectively with generation Y banking customers. Taking social media as an example, Ofcom has reported that half of 12-15 year olds with a smartphone visit social networking sites weekly compared with 33% in 2010. Just as instantaneous social interactions are more in-demand from consumers, especially digital natives, the same is expected from all other walks of life, including financial services. 1 in 4 of generation Y consumers (those aged between 18 and 24) said their opinion of their bank would improve if it offered mobile financial services, according to YouGov research from earlier this year. .

As the next generation of banking customers come through the ranks and look to choose their financial services providers, the business case to offer services via the mobile channel cannot be disputed. The provision of mobile banking services will be the differentiator between those banks that win over generation Y consumers and those that are sidelined by the digital natives for more innovative providers.

James Richards (Director, Mobile - IE)