Gen Y embracing mobile payments but not using tech tools to manage money
Less than one in five young Aussies use tech tools to manage their spending.
A new Bankwest survey has found that young Australians are embracing new payment technologies such as mobile payments to make purchases but appear to be shying away from using technology to manage their spending.
The survey of 1,001 people found that 38.2% of generation Y respondents used mobile payments for everyday purchases, and of those, 44.7% used their digital card for more than 50% of purchases. In both cases this was the highest of any generational group.
This compares to the less than one in five (18.7%) of generation Y respondents that had adopted tech tools to manage their everyday spending, such as a spend-tracker app. However, generation Y respondents did report high usage of other financial management methods, which include bank apps and online banking. According to Bankwest EGM Customer Solutions and Insights Pieter Vorster, this is the silver lining.
"When new innovations emerge, people often jump in quickly to integrate them into their lifestyles, but they don't always consider where that can lead them," Vorster said.
"The silver lining, especially for young Australians, is quick adopters are also open to innovations to assist them if money management tools are simple and easy to use. That's where the supportive role of financial institutions is so significant, particularly through encouraging customers to use tools within their banking apps, which are popular with gen Y."
This is backed up by a recent analysis by GlobalData, which found that consumers with Australia's major banks prefer day-to-day assistance with their money rather than more sophisticated financial tools such as those offered by robo-advisors. The most popular tools among customers were predictive balance alerts of insufficient funds, real-time balance alerts and assisted savings tools.
Australia's new digital banks have also been investing heavily in this space, leveraging AI and machine learning to offer customers spending insights and analysis within their banking app.
This will hopefully do something to combat another finding in Bankwest's survey, which revealed that 93.5% of generation Y respondents believed tech made it easier to spend without thinking and 90.1% said tech made it easier to spend what they didn't have.
"Banks have an opportunity to better connect their customers with these tools, such as payment alerts and credit limit adjustments, so they can use tech safely while spending within their limits," said Vorster.
"Customer needs are changing rapidly, and we need to ensure we're working to protect and enhance customers' financial wellbeing as they adopt these emerging technologies."
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