Improve banking experiences with Money Mobility
Even for the significant number of consumers who still prefer to open accounts with traditional financial institutions (FIs), most new accounts opened by consumers are through digital channels. At the same time, these consumers frequently link new accounts – whether digital wallets, peer-to-peer (P2P) or banking services – to an already existing account to fund it upon opening. On the other hand, transferring money between two accounts that a consumer owns can be fraught with pitfalls.
Moreover, with the ease of conducting such activities online comes the ease with which consumers can abandon a new account request and, seconds later, start the process all over again on a competitor’s site. When providers make it too difficult to transfer money from one account to another or to apply for a new account, they risk losing customers. Account providers must balance security and convenience to maintain customer satisfaction.
Security and authentication are ever-increasing in importance, as the same systems developed to make it easier for consumers can also make it easier for scammers. Therefore, account providers must ensure that their security protocols and systems can reliably verify identities and detect suspicious activity indicating fraud.
The first edition of Money Mobility Tracker® looks at the challenges that hinder money mobility and examines what FIs and FinTechs will need to address to ensure seamless and secure money mobility with all accounts.
Monetary Mobility Space Developments
Consumers are unlikely to keep large balances in their checking accounts, preferring instead to use the accounts as layovers for cash that will cover regular monthly expenses. According to survey data, 95% of US consumers have a checking account, and only 29% of them have a checking balance of $1,000 or more. Thirty-four percent of chequing account holders maintain a running balance below $100. Even the 13% who maintain a balance of $2,000 or more may not have the 25% to 30% monthly expenses that some experts recommend as padding in a checking account.
Digital-focused banks are gaining popularity as the FI of choice for consumers when selecting a primary current account. Around a quarter of people aged 21-26 and a third of those aged 27-41 say their primary checking account is with a digital first FI. Even older consumers in the 42-56 age bracket are increasingly turning to digital FIs for checking accounts. The share of these consumers declaring that their main current account is with such an institution increased from 8% in October 2020 to 22% in January 2022.
To learn more about these stories and other developments in monetary mobility, check out the News & Trends section of Tracker.
Up to date on how neobanks and FinTechs need to make money mobility a top priority
Neobanks and FinTechs are leaders in innovative financial services and solutions, pioneering many of the features now offered by large traditional financial institutions, but to maintain this edge, they must continue to innovate. In this month’s feature, Josh Stephens, VP of Products at neobank Current, discusses how neobanks can address money mobility and how to overcome the barriers between customers and their money.
PYMNTS Intelligence: Overcoming the challenges of monetary mobility
Consumers are increasingly opening new accounts to take advantage of specific features offered by account providers and to address new use cases that have become part of their daily lives, such as P2P payments. They also prefer to open these accounts through digital channels and are likely to leave a new account application if they are forced to use multiple channels to complete the application. While providers want to address this desire to open and connect accounts by making the process as easy as possible, they still need to make sure they’re dealing with process-related fraud.
This month’s PYMNTS Intelligence study examines the challenges facing FIs and FinTechs as they seek to enable money mobility and attract new customers.
the Money Mobility Tracker®a PYMNTS and Ingo Silver collaboration, examines the latest trends and developments shaping the money mobility space and the challenges FIs and FinTechs face in ensuring seamless and secure money mobility.