If banks were waiting for a sign to kick start mobile banking innovation into high gear or indeed commence at all the latest Think with Google report provides no clearer indication the time is now.
According to the report, mobile usage is in an unthinkable boom. Focus once directed at Millennials should be consciously shifted to Generation Zs – a younger, demanding demographic who can’t imagine life without a mobile phone.
Attention must be paid to Generation Z’s digital reality. The report suggests the average age black teens get their first mobile phone is around twelve. This coincides with the age at which said teens start making their first purchasing decisions. Research shows this age of mobile adoption to be significantly earlier than their older counterparts, which was likely between the ages of 16 and 20.
The younger generation is speedily catching up when it comes to e-commerce. A remarkable 66% of black teens are making purchasing decisions online, with the age group just above them (18-24) at around 88%. Of Generation Zs buying online, an astounding 52% are doing it from their mobile phones.
Be prepared for the pioneers
The behaviour and needs of Generation Zs is understandably difficult to predict, as they’re pioneers – the first generation who will never understand or have to imagine life without mobile phones. To correctly and affectively serve this market, financial service providers must be inconceivably agile in their offerings – and marketing thereof.
A task made more difficult by the intrinsic nature of traditional financial institutions – particularly on the African continent – who’s very fabric is slow-moving, marble and glass structure. Banks are replete with red tape and have, up until now, been overtaken in the financial innovation race by Mobile Network Operators who’ve been quick to serve the up-and-coming digital generation. Financial service providers must do the same, if not to be excluded from the market altogether.
The rise of digital payments
As it stands, around 51% of black teens still rely on cash as a primary form of transaction, followed closely by debit cards, which account for 29%. Outside of these, we can expect to see the explosion and expansion of payment systems like PayPal, Android Pay and Apple Pay, as they already account for 3% of all transactions in this group.
Digital payment systems show no signs of slowing down growth and the market is becoming increasingly more competitive as everyone scrambles to get their piece of the new generational pie.
By implementing and marketing smart mobile banking and payments systems, banks and retailers can collaborate with Generation Zs to make their lives easier and simpler purely with mobile accessibility. This generation is likely to see a quicker decline in the use of cash than any other, and banks should be waiting in the proverbial wings to better serve their young potential customer. Their innovations should focus largely on inclusive mobile banking systems that work across borders, as well as intelligent and safe point-of-sale payment systems.
The time is now
If the new report from Google reveals anything, it’s that there’s no more time for trepidation or consideration. Looking local, banks in Africa and all emerging markets need innovative and agile systems, implemented swiftly through FinTech partners. Reliance on internal innovation will be slow and clumsy. The key is in partnering with the right people, to get the best and quickest product that meets the needs of our next generation.
In doing this, financial service providers won’t only see the benefit in the growth of their bottom line through modernisation and increasing market share amongst Generation Zs, they’ll also play an active role in financially empowering and educating the next generation of spenders, while creating safer saving and systems.