New research shows that digitally driven millennials desire Open Banking and reject payment cards
An independent study of 2,000 consumers commissioned by CREALOGIX Group, the provider of digital banking solutions, has found staggering differences between the approach to finances and banking among the millennial generation. The research revealed:
- Almost half of under 35s have never used a credit card (44%) compared to just 24% of over 55s.
- While only 11 per cent of millennials state they do not use a debit card either, almost half use mobile phone wallets.
- 43 per cent of millennials use wearables frequently as a payment method, versus just 11 per cent of over 55s.
The research also found that digital currencies are more popular amongst younger generations with 1 in 4 under 35s using digital currencies versus just 4.5 per cent of over 45s. This illustrates the changing requirements of millennials when it comes to their banking solutions with many turning to alternative and emerging technologies.
When asked specifically about Open Banking, 50 per cent of millennials stated that they would like to have all their bills, accounts, investments – including digital currency – and other financial information on one mobile app. This increases to 60% in under 24s. 51% of millennials declaring that open banking is a good idea as they believe it will help them better budget themselves, versus 12% of over 55s who were in favour. Indeed, in the research 35% of under 35s said they want a better view of their finances, versus 12% of over 55s, something Open Banking will deliver.
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Additionally, 71% of over 55s do not believe there is any element of open banking they will use versus just 14% of millennials and 91% of millennials prefer banking apps and online banking with less than 2% using telephone banking and 6% visiting branches.
Born out of the EU-wide Second Payment Services Directive (PSD2), the Open Banking initiative was implemented by the FCA to promote greater competition and allow the creation of new solutions; bringing the UK banking industry firmly into the 21st century. The result will inevitably see banks shifting from being a one-stop-shop, locking customers into own-brand services, to allowing a more modular approach to banking.
Banks today find themselves at a crossroads. Increasingly savvy customers and digitally driven millennials expect speed, efficiency and self-enablement in every aspect of their lives. Until now, UK banks have not met these shifting expectations effectively due in part to the impact of legacy processes and systems. However, as consumers increase their engagement with a wide variety of services via smartphones and wearables – and with digital savvy challenger banks being introduced to the market – expectations will continue to increase.
Michael Bradford, CEO at CREALOGIX UK ltd. “This research shows that rather than being something to be afraid of, Open Banking should actually positively transform our relationships with our banks.”
“There are complex and widespread changes taking place in the financial services sector, driven by the wider digital transformation in our society as a whole. The Open Banking initiative has potential to provide a more personalised service and the ability to cover an individual’s every need in a single secure app” Jo Howes, Commercial Director at CREALOGIX UK ltd.
The CREALOGIX Group is a fintech top 100 firm and a global market leader in digital banking. Its fintech solutions offer bank clients a better customer experience, greater security and effortless online money management. The CREALOGIX product and service range spans the areas of digital banking, digital payment and digital learning.
The independent study was undertaken by Censuswide and interviewed 2,027 consumers aged 16 and above.