A survey conducted by Compass Plus, an international provider of innovative retail banking and electronic payments software to financial institutions and processors, has revealed that the age of the consumer plays a significant role when making financial decisions.
The survey, in which 650 UK residents answered questions about their banking and payments habits, found that behaviours vary between age groups in both their preferences towards certain channels and the levels of trust around using these different payment types.
Overall, Internet banking was the most popular method of banking for those under 45 years old (73.1%), with no significant difference between the under 21 year olds or the 30-45 year old age groups, averaging out at 57%. The mobile came in second for the under 29s at 26%, however for respondents in the 30-45 category the branch just won over the mobile device by 1.4%.
For respondents over 45 years old, the branch was still the most popular place to carry out their banking activities, at 43.9% for the 46-59s and 65.7% for the over 60s. For the 46-59s, this was very closely followed by Internet banking at 43%, however the over 60s second choice was telephone banking at 20%.
The results clearly illustrated the changing patterns of behaviour through the age groups as the respondents tended to use the banking channels that had been the most available to them during their banking history. The over 60s were much less inclined to use mobile banking (1.4%), whilst the under 21s were the least interested in telephone banking (0.8%). An interesting result was that despite the clear online payment habits for the younger respondents, when it came to shopping behaviours, the high street still won over the Internet at 57% to 40% respectively. This shows that whilst millennials are still actively visiting the high street, they would prefer to bank using the Internet or their mobile instead of popping in branch. With the older generation steadfastly sticking to the high street for both their shopping and banking needs (for over 60s - 94% and 66% respectively), it is evident that despite the hype around newer banking channels, habit is still the main driver of banking behaviour.
These ingrained repeat behaviours are also clear when analysing the respondents’ views on the most and least secure ways to pay, with the over 60 age group choosing cash (80%) and cheque (44%) as the most secure methods and 90% finding mobile the least secure. This is where things get interesting however, as whilst the payment methods the over 60s use directly correlate to how secure they perceive them, this is not so for the youngsters. Surprisingly enough, whilst the under 21s stated that 28% of them use mobile banking and 56% of them had used their mobile device to buy something over the last month, 55% of them found it to be the least secure way of paying. This suggests that consumer concerns around security and the effect this had on channel adoption is also age-related.
“Consumer behaviour has long since been driven by habit and this is evident in our survey results,” said Maria Nottingham, CEO at Compass Plus GB. “When asked if they would ever use mobile banking, 84% the over 60 age group said no, whilst the younger generation of under 21s who have grown up with mobile phones as part of their everyday life said yes (65%). 42.9% of the over 60s said that mobile payments would never become mainstream, whilst 48% of the youngest age group predicted that mobile payments will be mainstream in the next one to two years. With such a clear conflict of opinion between consumers in different age groups, it is even more certain that financial institutions and retailers alike must offer services across all channels to completely cover their customer base and ensure their loyalty.”