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June 22, 2022
When it comes to payments, the generational divide has been shrinking. While Gen Z and Millennials still lead the way in digital payments adoption, Baby Boomers and Seniors (over 76) are increasing their digital payments prowess. Research from the Federal Reserve recently uncovered that 83 percent of consumers indicate they are using at least one mobile payment app or digital wallet at least occasionally, including 71 percent of those 55 and older.
As customers of all ages gain comfort with digital solutions, they also are finding familiarity with Big Tech providers. Amazon, Google, Microsoft, and even social media providers like Facebook are either exploring or already offering payments services and competing for your customers’ transactions.
While customers place trust in their community banks, because they feel comfortable with Big Tech, a true competitive threat is beginning to take shape. When asked about their banking preferences, 30 percent of Gen Z, 46 percent of Millennials, 38 percent of Gen X, 11 percent of Baby Boomers, and 9 percent of Seniors said they would open an Amazon checking account if offered, according to a Cornerstone Advisors survey of 3,016 consumers.
Yet even with this Big Tech influence, community banks hold a strong position due to their longstanding customer relationships. To retain this competitive advantage around digital payments offerings banks should:
As you explore what’s next for your bank’s digital payments strategy, keep in mind the generational digital divide continues to narrow, and customers of all ages are looking for ways to make payments seamlessly, securely, and digitally. ICBA Bancard stands ready as your partner to help prioritize your digital payments journey.
Stay tuned for more information on our upcoming digital transformation roadmap and strategy workbook, and in the meantime, feel free to contact our team with any questions.