Debt-plagued college students apathetic toward mobile banking: report
College students, notwithstanding their reputation as mobile-savvy consumers, do relatively little electronic banking beyond checking account balances and transferring money between accounts, against a backdrop of climbing student debt, according to research from market intelligence agency Mintel.
While 64 percent of students have downloaded their bank’s mobile application, only 18 percent use their smartphone to conduct more than half of their transactions. The growth of student debt to 10 percent from 8 percent of United States total consumer debt since the fiscal third quarter of 2011 makes it greater than any type of U.S. consumer debt except mortgages.
“A majority of college students just have a basic checking account and therefore only need to perform simple tasks such as checking account balances, deposits, or transferring money,” said Dirk Rients, founder-CEO of Mobile Ventures.
“Mobile plays a bigger role for the parents allowing them to educate and control their kid’s finances and debt.”
Just 39 percent of those who have downloaded their bank’s app to their smartphone use it to deposit checks. As financial institutions continue to expand their electronic services for all customers, 80 percent of students still feel it is important to bank with companies that have branch locations nearby.
Sallie Mae college planning app.
Some 30 percent of those who have educational loans have monthly loan payments greater than $300, while 5 percent have monthly payments of more than $1,000.
College students have altered their attitudes toward financial services adjusting to residual effects of the most recent recession with over half considering debt as necessary in today’s world.
Many college students saw their parents and families negatively affected by the recession and as a result are much more conservative than people of older generations when it comes to their attitude about investing.
Seventy-three percent believe that the recent recession demonstrated how important it is to save for retirement. Similarly, 74 percent of college students feel that the primary purpose of money is to purchase security.
While 71 percent of college students are confident in their ability to manage their day-to-day finances, including 68 percent of females and 75 percent of males, a full 58 percent think credit cards can be difficult to manage.
Just 14 percent of college students have all their expenses paid for by parents or guardians. This number rises slightly to 17 percent for women. This indicates that college students have some responsibility for at least a portion of their own expenses.
Most college students (60 percent) – and especially women (64 percent) – pay for their own entertainment without help from parents or guardians. Furthermore, 27 percent have either some or all responsibility for paying for their own college expenses.
The greatest financial concerns for current college students include making enough money to live on their own (51 percent), making student loan payments (33 percent), and managing day-to-day finances (31 percent).
Mobile has quickly become an important channel for banks, as consumers grow more comfortable using their mobile devices for a wide range of financial services.
The increasing number of checks deposited each day via mobile reflects customers’ satisfaction with the mobile option.
Increasing students’ mobile banking skills is tougher to accomplish than it sounds, according to Jeff Hasen, CEO-founder of Gotta Mobilize, Seattle. “It will take more than an app to educate this age group. It would reverse generations of slow money saving adoption,” he said.
Guiding users through college planning with financial tools.
That said, mobile and a changed mindset would be a strong combination.
“The banks and lending institutions need to educate the students and parents more on the different services available on their mobile platforms,” Mr. Rients said.
“College students are much more conservative when it comes to purchasing good and services from their mobile device.”
Michael Barris is staff reporter on Mobile Commerce Daily, New York