Gen Y-ers who reject the convenience of online money management—they’re out there, folks.
Technology is one of the great equalizers. This point was reinforced for me last week when I received word that my grandpa, a spirited 86-year-old, had joined Twitter. Many of us assume that it’s the twenty- and thirtysomethings, born and raised alongside the internet, who feel no trepidation about banking online or on their iPhones. No, we scoff: Tech-wariness is the domain of grandparents and the Amish. But according to a recent study by the Canadian Bankers Association, just 53 per cent of Canadians aged 18 to 34 do the majority of their banking online. (Consider that 45 per cent of the 55-and-older respondents banked mostly online, too, and the generational disparity isn’t as great as you might think.) That margin seems low considering that, when I asked most of my contemporaries whether they banked online, they looked at me incredulously, and said, “Well, yeah.”
As I tried to figure out how the elusive other 47 per cent of Gen Y banked, friends and co-workers began to divulge stories of their supposedly modern friends’ e-banking paranoia. One colleague told me about a travel buddy of hers who, at 28, has never sent an email money transfer. Similarly, a 25-year-old university friend conducts most of his banking online, but absolutely refuses to bank using an app. “I have concerns about security,” he said. “A mobile network could get hacked. When I explain to friends that I’d rather just do it online, people are like, ‘Really? Okay. Your choice.’” (I should mention that, as an accountant, he’s not usually prone to money-managing anxiety.) Could it be that, for all of our constant tweeting and fancy Tupac holograms, that the “Me Me Me generation,” as Time Magazine recently called us, is not as advanced as we think we are—particularly when it comes to e-handling our money?
For answers, I called Vince Maniago, a group product manager for California-based finance tracking software (and app) Mint. Since its Canadian launch in December 2010, the software—which aggregates all of your bank accounts, credit cards, loans, mortgage, and investment info to help you track and create budgets—has been downloaded by hundreds of thousands of Canucks. Yet despite the fact that two-thirds of Mint’s customers are under 35, Maniago says they aren’t exempt from e-banking anxiety, particularly with respect to mobile apps. “That perceived lack of security—it’s a giant mental wall for people to get over, and many of them haven’t yet,” he says. “No one is 100 per cent safe from identity theft and fraud; it can happen to the most connected or the least connected of us.”
Maniago and his colleagues refer to this young demographic, particularly those just out of college, as the “Help me spend and keep me mobile” group: They don’t really care whether their smartphone is equipped to help them pay bills or loans—they just want to know that their balances are sufficient to keep them buying. (Sounds familiar.) This hands-off banking approach, coupled with quietly simmering anxieties about fraud, render a large chunk of Gen Y perfect candidates for e-banking reticence.
Minimizing this unlikely tech skepticism starts with a dose of reality. All online and mobile banking transactions are encrypted, meaning that any financial information you enter is scrambled to fend off hackers. Plus, if you notice a suspicious charge in your account after making a web transfer, most of the big financial institutions, like RBC and BMO, assume liability and offer full reimbursement for the defrauded amount. Comparatively, it’s a lot safer than e-commerce. “Something like a third of computers are infected with malware,” says Maniago. “If you’re using your credit card online, or storing confidential documents on your PC, that is several orders of magnitude more dangerous than banking securely.”
Ironically, Maniago suggests that the luddites among us may just need to grow up a bit to fully embrace modern banking options. “By the time you get to your early 30s, you split finances with a spouse, have a kid or a mortgage, and your cash-flow situation changes. Which paycheque goes to which bill becomes much more complex. These tools become necessary evils the older we get.”
Kids: It doesn’t appear this “mobile revolution” is going to slow down anytime soon. Bell just announced it has partnered with RBC to connect certain BlackBerry and Android models to customers’ bank accounts, enabling them to shop with their phones by the end of 2013. Even the Royal Canadian Mint is developing a “MintChip” prototype, which would allow transfers under $10 to be made to a friend by tapping your phones together. If you’re still worried, you could always tweet @mygrampa for reassurance.