The sound of money flowing in is usually music to a CFO’s ears. Though that sound of bills and coins is rapidly disappearing as a result of changes brought by—you guessed it—millennials, the money hasn’t. It’s common knowledge that millennials prefer mobile banking to traditional banking, and those habits have spurred the movement toward electronic transactions and the use of mobile wallets.
In a 2016 study, CCG Catalyst Consulting Group examined the habits of millennials and non-millennials alike with regard to mobile wallets. They found that while both groups used mobile wallets frequently for non-payment purposes such as boarding passes, loyalty cards and event tickets, millennials are driving the use of mobile wallet apps for electronic payments that happen without counting bills or swiping a card. About 50% of millennials use the PayPal Mobile App, followed by Google Wallet (25%) and Apple Pay (19.2%). However, only 6.5% of those surveyed preferred the mobile wallet offered by a banking institution. The low response might, in part, be based on a lack of awareness that their bank or credit union offers a mobile wallet. Once made aware that their banking institution may offer a mobile wallet app, 50% of respondents said they would use it, especially if it also offered features like money management, identity protection and other security features and the ability to integrate with other mobile wallets.
This lack of awareness represents an opportunity ripe with possibility. Jim Marous, co-publisher of The Financial Brand, agrees. “The potential for bank-branded mobile wallet growth lies in how well financial institutions can provide value that exceeds what is currently available from non-traditional providers.” In other words, institutions that provide the best mobile banking experience continue to win market share; mobile wallets are the logical next step.
So the key takeaway? The answer to what’s in your mobile wallet is winning over more millennials—and all that (silent) money.