Good Tech: The Race for Mobile Banking Customers

As mobile banking adoption skyrockets, it’s no surprise that competition among banks intensifies. Now, new data finds one big bank is pulling ahead – getting one out of every three Millennial or Gen Z consumers and naming them as their primary FI. Raddon Research finds that Bank of America is the primary bank for 31% of younger consumers. And while overall big banks dominate with technology, there is still opportunity for community banks and credit unions.

“The relationships between financial institutions and both Millennials and Gen Z is much more fluid than with older generations,” according to the Financial Brand. “[R]esearch indicates that both generations are more willing to move to other providers even after selecting a bank or credit union as their primary financial provider.” But that means implementing technology tools that younger consumers are looking for, along with branch banking that’s convenient and meets their needs. 

Fortunately, community institutions don’t have to compete head-to-head with big banks. Having consumer-friendly technology is often enough. As Brad Tidwell outlined in episode 16 of the Believe in Banking podcast, “How we compete is I think you have to be a fast follower. We can never keep up with the technology that JP Morgan Chase, or Bank of America, or Wells can roll out in a given year… What we have to do is make sure that we have everything that our customer needs. We’re not going to be first to market, but we can be a fast follower.”

Another way of getting best-in-class mobile technology is through partnerships, according to Luvleen Sidhu, founder and CEO of BM Technologies. In episode 23 of the Believe in Banking podcast, she describes how teaming up with experts can help community organizations scale their technology offerings. She says, “We want a partner that is dedicated to a path forward of really enhancing and accelerating their digital strategy. And they have a commitment to it and they want to put their resources towards this strategy and work with us to implement it.”

Additionally, nine out of ten Gen Z consumers “still prefer traditional banking providers to competitive neobanks and fintechs,” according to a new study by fintech company Marqeta. Forbes’ analysis of competition among the big banks finds that it’s not the technology itself that grabs them. They say digital banks are winning consumers’ loyalty by “providing products that: 1) are personalized for various segments of the market and 2) re-think the concept of what a checking account is.” So no matter the size bank, innovation and personalization will always win.