WILMINGTON, N.C. —While approximately 80% of Gen Z and 75% of Millennials have chosen a large bank as their primary financial institution, 52% are willing to switch to a community bank, 50% to an online-only institution and 47% to credit union, according to a new survey.
The results were released by Apiture, a provider of digital banking offerings, with the survey of 2,000 U.S. consumers conducted by The Harris Poll. The findings are included in a new paper, “Attracting Gen Z and Millennials: Seven Essential Strategies for Community Banks and Credit Unions, which is part of the company’s “Banking Through the Ages series.”
According to the company, the paper identifies important generational differences in consumers’ banking habits and preferences that will help smaller financial institutions better attract and serve young, digital-native consumers.
Key Findings
Among the findings:
- Younger consumers are least likely to choose community banks. Only 6% of Gen Z and 8% of Millennials consider a local bank their primary institution. Credit unions have captured 14% of Gen Z and 20% of Millennials, while 11% of Gen Z and 18% of Millennials have an account with an online-only institution, the survey found.
- Physical locations are waning in importance. “Despite 57% of Gen Z and 60% of Millennials stating that branches are an imperative, 45% of these consumers do not remember the last time they went to a physical branch. Further, across generations, half of Americans would not change where they bank if their institution closed all its physical locations.”
- Modern digital banking technology is critical for attracting young customers. Eighty-percent of Gen Z and 81% of Millennials report that digital banking is at the core of their banking preferences, and 53% of Gen Z and 51% of millennials identify it as a top need for choosing a new institution.
- Digital account opening is an imperative. “Financial institutions need to meet young customers where they are — online. While many institutions still require a branch visit to open an account, 41% of Gen Z and 38% of millennials consider the ability to open an account online a top need when choosing a financial institution.”
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