Pub. 4 2015 Issue 5

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 24 O f those switching banks in the past year, 26% did so at least in part due to a competing bank having a better bank app, according to our February 2015 Mobile Money survey. While the 26% figure looked back at those who actually had switched banks in the past year, we also asked about all smartphone users’ future plans. For instance, 2,315 of the 4,371 smartphone users we surveyed, or 53%, said their bank app was missing a feature. When we then asked these 2,315 survey takers if they would be interested in switching from their current bank “to a bank that offered the bank app feature you said was missing,” 54%, or 1,259 survey takers, indicated they would. Smartphone users willing to jump ship for a better app in general, according to our survey data, tend to be younger, live on the coasts and be far more likely than the overall survey population to pay $3 per month to use their banking app. They also tend to be interested in branchless banking and in opening a checking/savings account right from their phone. By location, according to the survey, most of the 1,259 willing to churn for a better app live on the coasts. The South Atlantic region, from D.C. to Key West, Fla., is where most of these potential switchers live (19%), followed by the New York/ Pennsylvania/New Jersey region at 18%. The third most likely home for those willing to switch banks for a better app was the Pacific region, which includes Alaska and Hawaii. The three trailing regions — with the smallest population of those willing to switch banks for a better app — were East South Central, West North Central and New England. Of these 1,259 survey respondents interested in switching banks due to app features, nearly half were millennials between 18 and 35, while generation Xers (36-47) made up 24%, baby boomers comprised 23% (48-66) and seniors 67+ made up the remaining 6%. When these 1,259 were asked if they were interested in opening a checking or savings account with a “branchless bank” that has no physical building locations, 83% said they were interested. When all 4,998 smartphone users in our survey were asked the same question, just 55% said they were interested. The features these 1,259 survey takers said were missing from their current bank app include the ability to review savings account rates (31% of respondents said they would like to have this feature, yet do not), and the ability to facilitate, from within their bank app, person-to-person payments (30% want this, according to the survey). Reviewing checking account rates is another feature that many respondents want to have added to their apps, with 29% marking this feature as missing yet desirable. Access to a mortgage calculator and the ability to compare mortgage rates are two other features that respondents are pining for, with 28% of respondents wanting each feature. And of these 1,259, 39% said they would pay $3 per month to keep using their mobile bank app, higher than the overall average of 24% for all 4,371 bank app users surveyed. And finally, we asked these 1,259 survey takers if they would be interested in opening a checking or savings account from their mobile smartphone without having to enter a branch or even use a desktop, laptop or a tablet. The overwhelming majority, 93%, indicated they would be at least somewhat interested in opening a checking or savings account from their Apple iPhone or Google Android phone, compared to 64% of all 4,998 smartphone users surveyed. Again this underscores the importance of mobile banking apps to this set of early adopters. By gender, male respondents were more likely to be willing to switch for a better bank app at 58%, compared to female respondents at 42%, according to the survey. The overall survey base was roughly 50/50 male/female. Of the 4,371 survey takers, 7.5% indicated they earned over $150,000 per year. Of this group indicating a willingness to switch banks for a better bank app, 9% earned over $150,000 per year. WOULD YOU CHANGE BANKS FOR A BETTER BANK APP? By John Fletcher, Senior Research Analyst, SNL Financial