FICO conducted a survey regarding digital account opening and it revealed some interesting generational data that is bucking the trends found by most other studies. There is an infographic of the studies key points that you can request here.
As National Mortgage Professional highlighted, over 70% of U.S. respondents willing to open a bank account via an app or website. More older people, meaning those over 45, are willing to do so than younger individuals which is not a common headline one reads. One reason for this result the study suggests is it’s not the technology involved, but the complexity and lack to knowledge that younger consumers have about banking. That lack of understanding is creating some hesitancy to open accounts digitally without some personal guidance:
New research released today by FICO, found that 71% of U.S. respondents are now willing to open an account via app or website.
Although most would assume the younger generations are driving this trend, the evidence shows otherwise. The idea of a tech-savvy generation does not always extend into financial services, especially since younger consumers are not as financially literate as older consumers. A majority of consumers between the ages 18-24 prefer digital banking, but nearly a third (29%) prefer slower, friction-filled methods such as phone calls or mail to open a bank account. Yet, this trend does not extend into the older generations: Only 6% of older consumers apply by phone call, 1% apply by mail.
Typically, younger generations are quick to learn new apps, considering how confident they are with technology, but they are new to the convoluted world of finance. FICO’s study shows that less than half (49%) of U.S. respondents under the age of 25 were comfortable downloading a financial institution’s app for banking, yet more than half (54%) of those over the age of 65 were comfortable downloading a provider’s app.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group