Pulse Report: Financial Services, Q1 2025

Customer satisfaction with digital financial tools continues to rise, with younger users showing significant gains. Satisfaction among users aged 25-34 has increased to 90%, reflecting positive responses to recent innovations in mobile app interfaces and engagement features. However, engagement remains a challenge for younger users when features are perceived as non-intuitive. Satisfaction among older demographics remains strong, hovering around 92%, though they express higher expectations for simplified navigation and accessible support.

To sustain these trends, financial institutions should prioritize mobile banking enhancements targeted at younger audiences. Simplifying navigation and adding visually appealing financial summaries can improve engagement. Gamified tools and personalized financial insights will also play a key role in retaining loyalty among this demographic.

Digital payments preferences - consumers turn to mobile apps over websites

44% of consumers prefer mobile banking apps and 32% prefer payment apps. Nearly 60% of Australians and the adults in the UK prefer their bank’s mobile apps. 

Preferences for digital payment tools are evolving, with younger consumers increasingly favoring mobile banking apps. In Q1 2025, 62% of users aged 18-34 reported a preference for mobile banking apps, an increase from 56% in Q4 2024. This growth is driven by the addition of features that emphasize convenience, such as integration with third-party digital wallets. Older users, on the other hand, continue to favor online banking portals, although their adoption rates have slightly decreased.

To address these shifts, institutions should expand mobile app functionalities, incorporating seamless multi-platform integrations and reward programs to maintain engagement among younger users. For older demographics, simplifying online portals and emphasizing security features will remain critical to sustaining trust and usage.

Use of digital tools peaks in middle-aged consumers

73% of customers aged 65+ use digital financial tools regularly or frequently, compared to 83% of younger age groups.

The frequency of digital financial tool usage among older customers has declined slightly, dropping from 66% in Q4 2024 to 60% in Q1 2025. This change is attributed to growing concerns over security and a lack of familiarity with recent updates. Younger users, by contrast, continue to report frequent use, with 91% remaining highly engaged.

To re-engage older customers, institutions should consider targeted campaigns, such as webinars on digital security and personalized support initiatives. For younger users, maintaining their high engagement levels will require the introduction of dynamic features like monthly budgeting challenges and personalized notifications.

Switching factors vary by country, though interest rates and security protection are cited most often

38% of consumers in Australia prioritize interest rates and fees, while 32% of consumers in Germany prioritize security and fraud protection.

Consumer priorities in choosing financial providers continue to vary across age groups. For older users, trust and reputation remain paramount, with 32% citing these as their top priorities. Among younger demographics, transparency around fees has gained importance, with 39% identifying it as a deciding factor—an increase from Q4 2024.

Financial institutions should focus on transparent communication regarding fees and rates for younger users. For older audiences, efforts should remain centered on trust-building through customer testimonials, robust fraud prevention measures, and consistent, high-quality service.

Consumers’ trust in AI shifts to be slightly less positive

Consumer trust in AI has declined, with increased skepticism (10.5%) and neutrality (27.2%) and reduced agreement (40.1%) and strong agreement (17.2%).

Between Q4 2024 and Q1 2025, consumer trust in AI has shifted. The percentage of respondents who strongly disagreed that AI would deliver a positive experience decreased slightly, from 5.9% in Q4 to 5% in Q1, suggesting a marginal reduction in strong skepticism. However, the proportion of respondents who disagreed rose from 7.9% to 10.5%, reflecting an increase in mild skepticism. Neutral responses also grew, from 25.4% in Q4 to 27.2% in Q1, indicating a growing segment of consumers who are uncertain about AI's capabilities. Meanwhile, those who agreed with the statement declined from 42.4% in Q4 to 40.1% in Q1, and those who strongly agreed dropped from 18.5% to 17.2%. These declines highlight an erosion of confidence among consumers who previously trusted AI to deliver positive outcomes.

The most significant trends are the rise in neutrality and disagreement, alongside a decline in agreement and strong agreement. These shifts suggest that while fewer people hold strong negative views, an increasing number are becoming cautious or skeptical about AI's role in delivering a positive experience. Financial institutions should address this growing uncertainty by focusing on transparency, sharing clear and evidence-based outcomes of AI applications, and providing educational content to help customers better understand AI's value. Reinforcing the presence of human oversight in AI-driven processes can further build confidence and reduce apprehension, particularly among those with mild skepticism or neutral sentiments.

Consumers are optimistic about AI’s potential impact on financial services

The Neutral category increased from 25.4% in Q4 2024 to 27.2% in Q1 2025, a rise of 1.8 percentage points. This highlights a shift toward ambivalence, as more consumers are unsure about trusting AI.

There was a slight decline in consumers' trust in AI to deliver a positive experience between Q4 2024 and Q1 2025. This shows a softening in strong opinions (both positive and negative), while neutrality and mild disagreement are on the rise. This shift shows the need for financial institutions to address consumer uncertainties and rebuild confidence in AI-driven experiences. Fewer respondents agree or strongly agree with trusting AI, while there is a noticeable increase in those who feel neutral. This shift suggests growing hesitation or uncertainty about AI's impact. Additionally, the disagreement categories—both disagree and strongly disagree—show a small but meaningful rise, indicating a subtle increase in skepticism.

To address this shift, retail banking institutions should focus on rebuilding trust through clear communication about the benefits and successes of AI in enhancing customer experiences. Educational campaigns can showcase real-world examples where AI has improved outcomes, alleviating consumer concerns. To further reassure skeptical customers, institutions should prioritize hybrid approaches that blend AI-driven tools with human support, demonstrating a commitment to reliability and transparency. Implementing feedback mechanisms to actively gather and respond to customer input about AI interactions can also strengthen trust. Finally, tailoring messaging to different demographics—emphasizing innovation and ease for younger users while focusing on security and reliability for older demographics—can help address varying levels of skepticism and improve overall consumer confidence.

Methodology