In order to find out more about the current state of retail banking we conducted a survey of around 1,000 consumers between the ages of 18 and 45. The result: Digital banking is a matter of course for millennials. However, they do not necessarily consider their own respective banks to be completely modern.
Findings from a survey by the insurance portal Knip indicated that more than 40 per cent of the respondents hide their cash in the refrigerator. Wherever it is stashed, it’s a known fact that Germans love their cash. This is also clearly reflected in the online survey conducted by us: more than one third go to the bank once a week and 8.5 per cent visit the bank every day or every other day. We assume that customers visit their branch so often in order to withdraw cash due to the lack of payment alternatives such as mobile payment.
Expensive cash instead of mobile payment
Banks love their customers’ need for expensive cash. Experts estimate the costs of the supply of cash to be nearly 4.5 billion euros. With reference to the Euro, the WirtschaftsWoche reports that “The copper and iron coins, of which there are 58 billion in circulation in Europe, are a loss-making venture. The cost of minting a one-cent coin is 1.65 cents. Four years ago, the former EU Commissioner Olli Rein complained that the Euro countries had already paid 1.4 billion euros because of keeping the mini coins”. The ECB cites the annual costs of money supply to be around one per cent of the EU’s economic output.
While in Germany mobile and P2P (Peer-to-Peer) payments are still a long time coming, digital banking is a part of everyday life, at least for the younger generation. For four-fifths of those questioned in the bank survey it is the preferred choice, with computer banking (more than 50 per cent) and mobile banking (approximately 27 per cent) being the favourites. However, millennials are quite familiar with mobile banking. They use their smartphones to check their financial status and make transactions.
Over 66 per cent would like to have a single app on their device that would allow them to access all financial information. This means there is definite potential in Open Banking. Financial Institutions can realise these concepts with a Mobile Application Platform which orchestrates their own and third-party applications whilst bundling them within a secure banking environment. Other modern technologies such as chatbots and biometrics are still in low demand. It would be worthwhile showing the customers what practical advantages these technologies can bring them.
In general, financial institutions are not fully exploiting the possibilities of positioning themselves as pace setters for modern banking. Fewer than 40 per cent of respondents think their bank is completely up-to-date. In this case, each institution needs to begin by emphasising its own strengths so as to differentiate itself from the competition. Not only do we offer a comprehensive set of software solutions for companies to achieve this, but we also advise companies individually on how to strengthen their future viability.
Download the entire Banking Survey for free!