CHARLOTTESVILLE, Va.—Better mobile apps are a huge reason why consumers make the move to other financial institutions, but few consumers are willing to pay for those apps, according to new study findings released today by research firm SNL Financial.
The same research also revealed insights into credit union members who are app users.
In a survey of 5,000 U.S. adults with smartphones conducted during February 2015, SNL Financial said it found some two-thirds of consumers aged 18 to 35 said they would switch FIs for a better mobile app. That’s far more than the 19% of people aged 36 to 47 and 11% of those aged 48 to 66, SNL Financial reported. Only 4% of people 67 and older said they’d switch to another financial institution if it had a better mobile app.
SNL said it found that in the 12 months prior to the survey, 11% of the respondents said they moved their primary checking accounts to other financial institutions, and for 26% of them, the reason was to get a better mobile banking app experience.
SNL Financial said that while lower fees, better service and relocation were bigger reasons to move to a new FI, the fact that mobile-app quality beat out incentive offers, better interest rates and branch locations is still significant.
While monetization of such apps has received some attention, 76% of those surveyed said they refuse to pay even $3 a month to use such an app. The survey found that age does make a difference, with about one-third of people aged 26 to 35 indicating a willingness to pay $3 a month to keep using their mobile banking app. The figure declines to 25% for Gen Xers and to 23% for people under 25. Baby boomers and seniors were the least willing to pay.
Other findings in the SNL research:
- Almost half of the respondents said their FIs’ mobile apps are not missing any features, but for those who wanted more, person-to-person payment capability and information about savings account rates topped the wish list.
- 54% said they’d be interested in switching to a bank that offers app features they think are missing. According to SNL, “credit unions that serve the east and west coasts are particularly vulnerable, according to the data, because 58% of the people willing to switch live there.”
- Although 88% of respondents said they use a mobile banking app at least weekly, but 69% also said they had visited a branch at least once in the last 30 days.
- Bank of America, Chase, Wells Fargo and US Bank still dominate the market, with 45% of all respondents using at least one of their apps, according to SNL’s list of the 30 apps with the most users. Navy Federal Credit Union and America First Credit Union were also on the list, though both ranked at or below 1% market share.
- The west coast tends to have more credit union-based mobile app users, with Boeing Employees Credit Union, Navy Federal, Golden 1 Credit Union, SchoolsFirst Federal Credit Union, BECU, First Tech Federal Credit Union and Alaska USA Federal Credit Union all appearing on the list of 22 mobile banking apps with the most users in that region.
- Respondents who don’t use mobile banking apps – two-thirds of whom are over 48 years old – said security is their biggest reason for avoiding mobile apps, and about 40% said they already do the work on a desktop or laptop. About one in five said they just don’t see the benefit.