For millennials, banking is all about the apps

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Forget low fees, friendly services and convenient location—what really gets some bank customers going these days is a great app.

In fact, a majority of the 4,371 respondents to a recent survey said a better app than the one their current bank offers would convince them to switch. The sentiment is particularly acute among millennials.

Over the past year, 26 percent of those responding to questions from SNL Financial said they switched based on a better app. Looking ahead, the importance of apps to the banking experience becomes even clearer.

SNL asked respondents whether they found their app lacking; 53 percent said they did. Of that group, 54 percent said they would switch banks based simply on one offering better services from the applications they access through smartphones and other mobile devices.

"Smartphone users willing to jump ship for a better app in general, according to our survey data, tend to be younger, live on the coasts and be far more likely than the overall survey population to pay $3 per month to use their banking app," John Fisher wrote in a report for SNL. "They also tend to be interested in branchless banking and in opening a checking/savings account right from their phone."

The largest cohort within that group was easily millennials.

Those who came into adulthood around the turn of the 21st century comprised 47 percent of the potential switchers, with 24 percent in the Gen X 36-to-47 age group, 23 percent baby boomers in the 48-to-66 group and the balance accounting for 6 percent.

Improving the app experience has been a major priority for banks, with many scurrying to come up with ones compatible for the coming Apple Watch.

"Although mobile-savvy customers want ubiquitous access, banks have struggled to provide pure-mobile services due to challenges related to security, providing always-on connectivity and replicating the in-branch experience," Sean Bowen, CEO of Push Technology, recently wrote on The Financial Brand.

Apps have been susceptible to various bugs including false log-ons, while Bowen said studies have shown users will quit on an app if it takes more than three seconds to load.

"In the end, the app's performance, flexibility and the experience that it is creating for each user will determine which banks succeed in the mobile game," he said. "That comes down to optimizing security without compromising speed, intelligently processing and distributing data packages to ensure performance no matter the conditions, and integrating the app experience with customer service."

The most important feature respondents wanted added to their current app was the ability to see savings account rates (31 percent) while being able to execute person-to-person payments was next at 30 percent. The ability to review checking account rates and access to a mortgage calculator also ranked high.

The survey had a margin of error of 2.8 percent for most questions.