As history has shown, new generations are open to embracing new forms of technology while older generations are a lot more reluctant. Today’s generation of millennials, which is the most tech-savvy of them all are open to unconventional types of banking services, but Generation Xers and Baby Boomers do not share the same level of enthusiasm.
With the advent of peer-to-peer lending platforms, smartphone banking applications and mobile wallet apps, millennials are taking advantage of these new innovations and features while at the same time veering away from conventional forms of banking.
A new survey conducted by FICO, the predictive analytics and decision management software company, takes a look at how United States millennials are on the brink of changing their banking behaviors and are starting to utilize non-traditional financial services.
The report discovered that one-third of millennials are expected to use mobile wallet services this year, half plan to use alternative payment services and one-quarter are mulling over the possibility of using a peer-to-peer loan. In other words, the world of banking is evolving.
In fact, millennials are a lot more likely than their older counterparts to use something like Apply Pay or Google Wallet over the course of the next 12 months. Also, more than half (56 percent) of younger millennials - those aged 18 to 24 - are already employing alternative payment services akin to PayPal compared to those who are 35 and older.
"We already know that Millennials are inclined to conduct common banking activities through the digital channel," said David Vonk, who leads the North American banking practice at FICO, in a statement. "While alternative banking may still be in its infancy, it has the potential to grow rapidly, especially as the Millennial generation enters its prime and pushes these services to the forefront of its banking agenda."
When it comes to peer-to-peer lending, just one percent of millennials have already taken out such a loan. However, 23 percent of these young adults are considering this financial service this year. Moreover, millennials are 10 times more likely to mull over the idea of peer-to-peer lending than Baby Boomers and twice as likely than their predecessors, Generation X.
As we reported earlier this month, millennials are opting for credit unions instead of traditional financial institutions. Credit unions are not-for-profit banking outlets that offer affordable checkings, savings and credit accounts. But there’s more to it than that: credit unions are seen as the adversary to the much detested banking industry, and millennials abhor all things Wall Street.
In addition, credit unions are beginning to adopt many of the tech features that banks already offer, such as mobile banking, online banking and remote deposit. In addition, credit unions work one-on-one with their customers by hosting workshops and free classes on how to manage money.
Since millennials will soon become the biggest consuming demographic and dominate the labor market in a few years, this age demographic may very well have the power to modify how we conduct our day-to-day tasks.
Are you a Millenial using any of the new methods mentioned above? Have you had a good experience with them? Your thoughts and comments below please...