Report: Millennials, Minorities Lead Shift To Digital Banking

Blacks, Hispanics, young people lead growth in mobile, online banking

mobile payments

A recent Business Insider article says an overwhelming 88% of U.S. millennials (18-34) use digital banking, including banking on PCs and mobile devices. That’s according to a survey from TD Bank.

Their top digital banking activities, compiled by Business Insider include,

  • 84% say they use digital banking for checking balances and account activity.
  • Nearly 60% say they use digital banking to pay bills.
  • 56% say that they use digital banking for transferring money.

But millennials are not the only demographic leading the charge away from financial brick and mortars.

A recent report from Pew Research finds African Americans and Hispanics equally more embracing of mobile banking. The research also finds 51% of adults in the U.S. bank online and 35% of cellphone owners bank using their phones.

Another report, this one from the Federal Reserve Board last year, found that blacks and Latinos make up a “disproportionately high rate” of mobile-banking users.

According to the Pew study, 41% of nonwhites say they use their smartphones to check their balances and make other transactions, including 39% of blacks. Only 32% of whites said they bank on their cell phones, that’s below the overall national average of 35%.

RELATED: 3 Things to Do Before You Start Banking From a Smartphone

Blacks also used their phones more than any other racial or ethnic group—averaging more than 1,300 voice minutes and 780 text messages a month—and their use of mobile data and apps is very high.

So the big question is, why do blacks feel more comfortable banking on their phones than inside their local branch?

Dedrick Muhammed, executive director of the Financial Freedom Center says, “Historically, access to brick-and-mortar banks is not as prevalent in African American communities.” He also says that many banks charge higher fees to bank in person than online saying, “So you have a cheaper product, using a cheaper means that provides greater access to African Americans. It makes sense that African Americans use mobile banking more.”

According to African American Cyber report, “Many black communities simply do not have banks close by. The working black people there have discovered how to manage their money electronically. They go to their smartphones.”

The website also states, “Higher income African Americans expect ease and convenience just like higher income whites. They have access to the technology, the high speed connections and are early adopters of mobile technology.”

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