Just who are these digital drifters and what are they doing at your credit union? “Digital drifters” is a label that describes consumers who use their financial institution’s mobile banking and online banking services regularly, but do not use their bill pay services. Without bill pay, these individuals can easily slip to another institution,” said Jim Van Dyke, CEO of Javelin Strategy and Research.
Van Dyke, who will share his insight at Catalyst Corporate FCU’s Oct. 22-23 Economic Forum in Frisco, says this type of market segmentation – dividing a field of membership into subsets of consumers with common needs – can help credit unions design services that are relevant to that segment’s specific needs and desires.
“Sixty-one percent of digital drifters are under the age of 35. Fifty-one percent work full-time, compared to 42 percent of all consumers. Most are still in the formative stage of their financial lives, and they have fewer bills,” Van Dyke explained.
Bill pay is a key area for improving consumer return on investment, Van Dyke said. “Surveys indicate that bill pay improves loyalty to a primary financial institution (PFI), increases share of wallet and increases profitability.”
Digital drifters don’t think of mobile banking as a place to pay bills – at least not yet. According to Javelin research, 70 percent pay bills online at a biller website instead of a financial institution website. But credit unions have the opportunity to woo these drifters back.
“Studies show that consumers actually prefer using their PFIs to pay bills,” said Van Dyke, “so design your mobile banking app as a ‘remote control’ for all their accounts, a way to centrally manage and control their finances across all channels from their mobile device.” Emerging technologies, such as Picture Pay – the ability to snap a picture of a bill and pay via a mobile device – are likely to increase mobile bill payments, as well.
Digital drifters definitely have an affinity for their phones, Van Dyke said. “Eighty-three percent of digital drifters own smartphones, 92 percent take photos, 70 percent use geo-location services and 73 percent are early adopters or fast followers of new technology. Their phones are a computer first, and then a phone…maybe.”
Digital drifters use both digital and “old school” banking services to manage their finances. Van Dyke said that while 73 percent use mobile banking weekly, 21 percent still make ATM deposits, compared to 15 percent of all consumers. Digital drifters also watch money very carefully: 38 percent monitor balances daily, compared to 26 percent of all consumers, and 43 percent transfer funds monthly, compared to 37 percent of all consumers.
Van Dyke said digital drifters view their financial institution as a partner: three out of four expect their financial institution to warn them if they are at risk of overdrawing accounts, triggering penalty fees or making any financial missteps.