Financial institutions with mobile apps for digital lending are meeting consumers where they are—on their smartphones. That’s because today’s borrowers want the convenience of searching, pricing, deciding, and acting on loans from anywhere.
According to a recent GoBanking Rates survey, 55% of consumers prefer banking via mobile app followed by online (31%), and in-person at a physical branch or ATM (14%).
The ubiquity of smartphone use for digital lending is a trend financial institutions can’t afford to ignore. Adapting lending processes for mobile is crucial to win the business of younger borrowers and to retain existing customers of all ages.
The Rise of Mobile
A 2021 Pew Research Center study found that the vast majority of Americans have some kind of cell phone (97%) and 85% own smartphones. Whereas distribution is roughly even between men and women (85% of men and women own smartphones) and among racial and ethnic groups, the distribution by age, income, and education shows wider gaps.
Smartphone ownership by age:
- 96% ages 18–29
- 95% ages 30–49
- 83% ages 50–64
- 61% age 65 and over
Smartphone ownership by annual income:
- 76% making less than $30,000
- 83% making $30,000–$49,000
- 85% making $50,000–$74,999
- 96% making $75,000 or more
Smartphone ownership by educational background:
- 75% of people with high school diplomas (or who didn’t graduate)
- 89% of those with some college education
- 93% of college graduates
Mobile Is a Top Reason Consumers Switch Financial Institutions
Among the reasons consumers give for switching financial institutions are better interest rates, lower fees—and a better digital experience.
The recent Mobile Banking Competitive Edge Study from Insider Intelligence found that 89% of consumers use mobile banking services. Broken down by generation, mobile banking users are comprised of:
- 97% of millennials
- 91% of Gen Xers
- 79% of baby boomers
According to a survey from digital consultancy Mobiquity, 35% of consumers under age 55 say the main reason they would switch banks is for an easier-to-use mobile application. The type of account they’re most likely to move: their mortgage.
Providing the Digital Lending Experience Consumers Expect
When it comes to attracting and keeping borrowers, maximizing convenience is just as important as advertising low rates and fees.
If you require a driver’s license as a stipulation for a loan, borrowers who submit applications via mobile don’t want to visit a branch location to deliver required documents, or even scan and email them. Instead, they want to take pictures of documents with their phones and send them to you within seconds—which will speed up and simplify your internal processes, too.
And while age matters, studies show that mobile usage is increasing among all age categories and incomes. Meeting consumers where they are—on their smartphones—will enable you to stay competitive by providing the convenience and flexibility consumers expect.
The Future of Lending
What does the ubiquity of mobile phones mean for lenders? It means flexibility, convenience, and the future of lending.
Download our ebook—How to Attract Multiple Generations to Open New Accounts and Apply for Loans—to learn more about building long-term financial relationships with consumers in the mobile generation.