80% of baby boomers use mobile banking

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Mobile banking continues to grow, with one in three consumers initiating contact with a new bank based on the level of convenience its mobile banking services offer. The process is being accelerated by baby boomers who are rapidly adopting mobile banking services, according to the Korea Financial Consumer Report 2024, released by the Hana Institute of Finance on Thursday.

The annual report, which tracks consumer experiences in various financial sectors, products, channels and services, focused on the establishment and expansion of consumer relationships with banks in its latest edition.

It confirmed that the influence of mobile channels has been expanding further, with a significant increase in mobile finance among baby boomers — those born between 1946 and 1965.

The ratio of baby boomers using internet-only banks was 66 percent, up 11 percentage points from the previous year. Their transaction rate with fintech or Big Tech firms also rose 8 percentage points to 88 percent, while mobile banking use surpassed 80 percent, narrowing the gap with younger generations.

The report noted that baby boomers have relatively larger assets and high loyalty in financial transactions. “Their increased interest in asset management and greater mobile utilization could potentially have a significant impact on the market,” it pointed out.

Four out of 10 financial consumers initiated transactions with new banks during the past year. Among them, 30 percent chose the bank primarily due to the convenience of its mobile channels. Even after the pandemic, financial consumers decreased bank branch visits by 6 percentage points, while mobile banking increased by 6 percentage points. Consumers have high expectations of digital asset management services, the report stressed.

The report showed polarization among households, with 28 percent having significant savings capacity — more than half of their income — while 35 percent had little capacity for saving. The ratio of both groups increased from the previous year.

Consumers with loans prioritized loan repayment over investment when extra money became available.

"Consumer changes are accelerating as mobile channels spread, and the rapid influx of the baby boomer generation into mobile banking is nearly completing the transition. The popularity of short-term investments and virtual assets has decreased, while more consumers seek stable management within their knowledge and experience,’ said Yoon Sun-young, a research fellow at Hana Institute of Finance.