The Missing Link: Where Banks May Be Failing Consumers

In The Wizard of Oz, Dorothy journeys along the Yellow Brick Road, makes new friends, unmasks the Wizard, and defeats the Wicked Witch — all in her quest to get back home to Kansas. But, at the end, Glenda tells her: “You've always had the power, my dear. You just had to learn it for yourself.” 

What does this have to do with banking? Our latest survey of more than 1,000 U.S. adults shows most consumers may be unaware of the power they hold to bring their finances into one view.

Fixing the Connectivity Gap

Fifty-seven percent of consumers said they would pull together all of their finances into a single mobile app to make them easier to track and manage if they had the option. And, the numbers go up among younger generations — 62% of Gen Z would do this and 64% of Millennials. 

Yet, nearly every single financial institution and fintech in the U.S. offers the option for consumers to link external accounts. Consumers, like Dorothy, have had the power all along but only a small portion know it — just 13% said they have already pulled together their finances into a single mobile application. 

This points to a tremendous opportunity for financial services providers to better educate consumers about the value of connectivity. With a more complete picture of their finances gained from connecting their accounts, consumers can better understand, track, and manage their finances, which helps them become financially stronger and reach their financial goals. 

At the same time, financial institutions can drive higher levels of engagement, deliver more personalized experiences, and gain greater intelligence about their customers by enabling consumers to easily connect all of their financial accounts into a single place. This ultimately translates to higher deposits, loans, and interchange revenue, as well as longer term customer retention. 

Beyond education, what creates the best connectivity experience for consumers? It comes down to ease, speed, and trust: 

Make it easy:

Forty-three percent of consumers say the most important factor in bringing together all their financial accounts in a single app is being able to do so easily. Other top factors include knowing their financial data is safe and secure (31%) and the ability to control and manage who has access to their financial data (14%). 

Make it fast:

When asked how much time they would expect it to take to add one of their financial accounts to a consolidated view, younger generations have less patience. Fifty-three percent of Gen Z expect it to take no more than 30 seconds while 15% of Gen Z say less than 10 seconds. This is compared to 32% of Baby Boomers who say no more than 30 seconds and 8% who say less than 10 seconds. Overall, 49% of consumers say they expect it to take no more than one minute. 

Make it trustworthy:

For the small portion (12%) who would not bring together all of their finances into a single mobile app, 41% say they don’t trust a single app to keep all of their financial data safe. One-third say they don’t want a single app to have all of their information.

While we asked specifically about bringing together accounts into a single mobile application, these same principles hold true for desktop experiences. In fact, 80% of U.S. consumers agree they expect their mobile app experience to be consistent with the online or desktop experience. Here’s what else consumers had to say about their mobile banking experiences today:

Banking on Mobile

Our previous research found that mobile banking applications top the list of what’s most important in choosing a financial provider. Now, our latest findings show a bad mobile banking experience could be a dealbreaker for consumers. 

But first, let’s look at what mobile apps consumers use to manage their finances. The most popular finance-related apps are payment apps like Venmo, Paypal, or Cash App — 80% of consumers have these currently downloaded on their mobile phones. This is closely followed by apps from banks or credit unions (77%). From there, less than half of consumers have other finance-related apps, including: 

That said, consumers have multiple mobile apps to choose from — 47% of respondents have 3 or more finance-related mobile apps on their phones today. This remains consistent from last year. And, for the most part, the younger the generation, the more apps they have: 

And, most consumers are using these apps every single day — which reinforces the need for a consistent experience. In fact, nearly one-third of consumers (31%) say they log into the mobile banking or finance app they use most often every single day. An additional 22% say they log in multiple times a day. 

Bad Mobile Experiences Can Make or Break the Bank

With so many finance-related mobile apps at their fingertips, consumers are unlikely to turn to financial providers that offer a sub-par mobile experience. The majority of consumers said they are not likely (35%) or very unlikely (22%) to have an account with a financial provider that had a poorly-rated mobile app or bad mobile experience. 

Among the 1 in 5 consumers who said it was likely that they would have an account, habit and convenience drive their decision: 

• 54% said they would have an account if the financial provider had a location convenient to where they live
• 18% said it’s the financial provider they’ve always used
• 14% said it’s too much hassle to switch providers

But, simply having an account doesn’t mean they are using the mobile app. It also doesn’t mean they will keep using the mobile app if the experience gets worse. Sixty-five percent of consumers say they would stop using the app if the mobile experience changes for the worse. 

At the same time, a good mobile experience is not the only make or break feature of a financial provider for consumers. Fifty-seven percent said they’d likely seek out a new financial provider if their current one couldn’t deliver on these most wanted features (see below). This is a slight increase from 18 months ago — then, 54% said they’d likely seek out a new provider. 

Among younger generations, the chances of them leaving if a financial provider can’t deliver on their top features is even higher. Sixty-three percent of both Gen Z and Millennials said it was likely they would seek a new financial provider. Men are also more likely to seek a new provider — 63% said it was likely compared to 51% of women. Finally, 67% of those with an annual household income of more than $100,000 are likely to seek out a new provider. 

So how do you ensure a good mobile app experience? Our research shows it should be personalized and relevant: 

Personalization:

Nearly half of consumers (46%) agree they expect greater levels of personalization from the app than what they receive today. Consumers want a financial partner, not just a provider. Across the board, consumers want better education, insights, and tools. And these most wanted top financial wellness features remain fairly consistent from when we last asked 18 months ago. 

When asked about the top features they most want to help them with financial wellness, here’s what ranked in the Top 3 most often by generation: 

Relevance:

Key to delivering a personalized experience is ensuring that the insights and information provided is accurate and relevant. However, nearly 1 in 4 (24%) agree they often see irrelevant or outdated information in the insights provided. 

More broadly, consumers want to be able to take immediate action — order a card or issue a virtual card, open new accounts online, set up payments, etc. — when it comes to managing their accounts online or through a mobile app. When asked about the top features they most want from their financial provider, here’s what they said: 

Leveraging Artificial Intelligence to Manage Finances

Artificial intelligence (AI) can help financial providers gain new efficiencies, reduce costs, and improve customer experiences. However, consumers are still wary about putting broad trust in AI to help them track and manage their finances. 

Forty-three percent of consumers say they do not trust the use of AI to help them track and manage their finances, while another 28% said they aren’t sure. Men are more likely to trust AI to help with finances — 35% said yes compared to 23% of women. Gen Z is the most trusting out of the various generations (37% said yes) however most Gen Z consumers (43%) still don’t trust AI. 

However, while most don’t have a blanket level of trust in using AI to manage their finances, the story changes when you ask about specific finance-related tasks. 

When asked how likely they are to trust AI to help with specific finance-related actions, consumers show higher levels of trust across a wide range of tasks. Consumers are likely to trust AI to help them with the following: 

Most Consumers Trust AI for Automated Reminders and Insights 

• 59% deliver proactive reminders to pay bills, save money, etc. 
• 57% provide a comprehensive breakdown of how they spend money
• 51% personalized recommendations on where you can make changes to improve finances

Consumers Not Fully Ready to Give Up Human Interactions for Support, Investments, Loans, or Advice

• 51% provide customer support when you need assistance
• 50% automatic savings options, such as rounding up to the nearest dollar on purchases and depositing in savings
• 46% provide basic financial advice, such as how much to put in savings or pay towards debt
• 42% categorize transactions to help understand where money is going
• 42% process a loan or credit application based on their financial data, including setting credit limits or approving/denying a loan
• 39% provide investment-related financial advice, such as stocks to purchase, retirement planning, etc. 

As financial providers embrace AI within their processes to support consumers with finance-related actions, consumers may not be fully ready to give up human interactions. Financial institutions and fintechs should think about how to strike the right balance between intelligent automation with AI and live customer service representatives and financial advisors.  

Is Summer Spending on the Decline? 

As the summer comes to a close, our research also took a look into how consumers are managing their finances through the summer months. In June 2024, CNBC reported that 38% of adults said they plan to take on more debt to travel, dine out, and see live entertainment in the summer months, according to a report by Bankrate. This is in part due to summer “funflation” — a term economists use to explain the increasing price tags of live events after the forced lull in travel and entertainment caused by the COVID-19 pandemic.

However, our survey paints a different picture. Increased prices caused by funflation and the economic environment have instead caused consumers to be more conservative with their summer plans. In fact, 58% of U.S. consumers say they are spending less on vacation and travel this summer compared to last year in order to save money. This is even higher among Gen X (59%) and Baby Boomers (68%). 

Leveraging MX’s robust customer analytics, which powers the data experiences for consumers and financial providers, we also took a deeper look into the data surrounding 5.2 million consumers and more than 1.5 billion transactions to see if what consumers spend matches what they say. Our own data analysis shows that consumer discretionary spending is down across all major categories from last summer to now. 

Despite the overall slump in summer spending, our data does show increased spending with budget-conscious merchants like Sam’s Club and Aldi, as well as budget-conscious travel options like Booking.com and Expedia. In addition, at-home entertainment seems to be going strong — spending has increased on streaming services like Disney+ and Spotify, online gambling platforms (including FanDuel, DraftKings, and BetMGM), and convenience brands such as DoorDash and UberEats. 

While the survey shows travel and vacation spending is down, U.S. adults likely aren’t cutting down on expenses for their kids. Only 13% say their children are participating in fewer summer activities than last year in order to save money. Instead, nearly 1 in 4 (24%) are spending more on summer activities for their children than last year. 

And, this doesn’t mean everyone is saving this summer. One-third say their vacation and travel spending is higher this summer compared to last year. For those who are spending more, most are planning ahead — 62% say they save money throughout the year to accommodate higher expenses during the summer. Just 24% say they charge more expenses to their credit cards during the summer. 

So what does the average entertainment and travel spend look like? The largest group of consumers (25%) spend $101 to $250 during one summer month on entertainment and travel. This includes things like streaming services, ticketed events like movies, sports, and plays, concerts, vacations, and non-business travel. During the rest of the year, the largest response group (27%) spend less than $100 on entertainment and travel spending in an average month. 

What’s Next

This research shows a few key areas of opportunity for financial services providers looking to differentiate themselves and create additional value for their customers. Here’s our top 3 recommendations on what to consider within your digital and mobile banking strategy: 

1. Ensure connectivity options are easy, intuitive, and obvious. It’s clear consumers want to connect their accounts but most don’t know they have the power to do so.
2. Create a consistent mobile and online experience. Consumers are looking for consistent experiences regardless of the device they use to engage with your platform.
3. Evaluate your mobile banking app experience. Consumers expect more personalization than ever — and have a clear list of top features they want to leverage. If your mobile app fails to deliver, this could lead them to look elsewhere. 

About the Survey

This survey of 1,025 American adults was conducted by MX in July-August 2024 using an online survey platform. Results included a nearly even split in responses across each generation (Gen Z, Millennials, Gen X, Baby Boomers) based on birth year, as well as gender (Note: nonbinary respondent sample size too small to calculate) and ethnicities (White and non-White [Asian, Black, Hispanic, Other]). 

About MX’s Summer Spending Data

MX analyzed data from 5.2 million users who had at least 60 credit card or checking account debit transactions. Each summer period spans from June 1 to August 20. Note: Investment, transfer, uncategorized, and unknown transactions were excluded from the analysis.