The days of carrying wads of cash and paper check books are quickly fading. Today, it’s not uncommon to see consumers swipe debit cards for cups of coffee and use pay-by-phone apps to split large dinner tabs. The world has gone digital, and payment methodologies are rapidly gaining prominence among savvy consumers. And when retail banks assess areas of consumer opportunity, they should definitely be looking at the mass affluent, those households with $250,000 to $1,000,000 in liquid assets.
While the launch of new online and mobile wallet services will likely be readily used by mass affluent Millennials, older generations in the same tax bracket might not be as quick to adopt. They do, however, live with their smartphones, which means their high ownership rates could be a key to future use. In terms of size, mass affluent Baby Boomers that are still in the workforce will likely lead the pack, representing a key demo for banks and credit companies that have rolled out wallet app technologies and other e-payment services.
But while tech companies may have the upper hand when it comes to tech-friendly quick transactions, banks currently have the edge when it comes to more substantial banking needs, like making big financial decisions and investing for the long term. According to the Digital Enablement for Retail Banking report, the vast majority of (84%) of mass affluent Boomers and 81% of mass affluent Millennials say they believe it’s very important to engage with highly reputable and well-known banks when choosing financial products like mortgages. And 84% of mass affluent Boomers and 79% of mass affluent Millennials say they value a trusted, knowledgeable financial broker or adviser to help them make financial decisions.
Mass affluent consumers are already engaged with digital banking channels. These upscale consumers expect a seamless transition and user experience from one channel to another—whether they’re in a branch, online or at the ATM. In terms of channel preference, Millennials are more likely to use mobile banking while Boomers are more likely to use online banking.
When mass affluent Millennials use mobile banking, 27% prefer to use it to check their balances and 18% prefer to use it to transfer funds. Most mass affluent Boomers don’t list mobile banking as their preferred channel for banking activities. In fact, only 5% say they prefer to check their balances on their mobile devices. Among those who use mobile banking, mass affluent Boomers are more likely to use tablets over smartphones, while mass affluent Millennials are more likely to use their smartphones.
Mobile banking engagement may be limited for mass affluent Boomers, but these older consumers are active online bankers. The vast majority (92%) of mass affluent Boomers indicate online banking is their preferred channel for paying bills, as 88% obtain information about their bank and 87% check their balances online. About two-thirds (65%) of mass affluent Millennials pay bills online, as 56% obtain information about their bank and 55% transfer funds online.
For additional insights into how the different groups among the mass affluent are using technology with respect to their finances, download the Digital Enablement for Retail Banking report.