Yahoo Finance Mobile banking threatens the future of Aussie bank branches
There’s not much we can’t do from our phones anymore. We can invest and trade stock, run our business, and organise our lives, all from a powerful little device that fits in your pocket.
We’re also transferring our money and paying bills with just a few taps on our screen, so it’s no wonder that the rise of mobile phone banking is coinciding directly with the fall in the number of times we visit our local branch.
In the six months to October 2014, 6.5 million people were visiting bank branches in an average period of four weeks. But in just four years, that figure has dropped by 27.2 per cent to 4.73 million.
At the same time, mobile banking has seen a roaring 62.2 per cent growth, jumping from 5.66 million in 2014 to 9.18 million in October 2018.
“Internet banking using a website remains the most popular banking channel at 47.1 per cent but has shown a decline from 52.3 per cent in 2014,” Roy Morgan said.
“On current trends looks like being surpassed by mobile banking within a year or two.”
Roy Morgan industry communications director Norman Morris pointed to the rise and ease of technology as the reason for why the take-up of mobile banking had skyrocketed.
“The switch to mobile banking has been a result of rapid technological change, reinforced by high satisfaction levels with this relatively new way of dealing with banks,” he said.
“Satisfaction with mobile banking is the highest of all banking channels with 89.2 per cent, compared to branches with 85.7 per cent, and as a result it is likely to be contributing to the increasing preference for mobile banking.”
Who’s driving the growth in mobile banking?
No surprises here – banking through smartphones has been embraced most enthusiastically with millennials, or those born between 1976 to 1990.
This group is also among the lowest in bank branch visits, with less than one in five people (19.8 per cent) in this demographic saying they visited a branch in the last month.
“Millennials now number 3.34 million users, or 36.4 per cent, of the total mobile banking market,” said the research house.
Generation Z only take up 26.3 per cent of the market (2.41 million), and Generation X claims 24.6 per cent (2.26 million).
“The strong preference for mobile banking by millennials is a result of them having grown up with technology, compared to the older generations who have been brought up only using branches,” Morris said.
“As millennials get older however, their financial needs are likely to become more complex and so they may also require some type of personal contact, possibly involving a branch.”
But don’t worry about branches becoming extinct entirely – pre-boomers and baby boomers, or those 58 years of age and older, are still keeping branch staff in good company.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.
Read next: The economies of these major Aussie cities are pulling ahead