SAN ANTONIO—Credit unions looking to educate members may will want to pay attention to one new finding: More consumers are looking to Tik Tok and YouTube for financial advice than they are their own financial institution, according to new research.
Nearly half of the respondents in the research from Vericast said they seek financial advice from friends or family, while less than a third are seeking it from a bank, credit union or financial advisor. Thirty-four percent of Gen Z consumers obtain financial advice from TikTok and 33% get it from YouTube, while only 24% of this age group seek advice from financial advisors, according to Vericast, which surveyed 1,000 adults.
“It is clear that financial institutions have a critical need to innovate quickly and reimagine their approach to retain customers,” said Stephenie Williams, VP-financial institution marketing product and strategy at Vericast. “Banks and credit unions need to meet customers where they are, not only positioning themselves as a go-to, trusted resource providing education through traditional strategies, but also using new channels and platforms to reach younger generations.”
Opportunity Seen
According to Vericast, the findings show there is opportunity to deliver on evolving expectations to help banks and credit unions acquire and retain customers/members amid market volatility.
According to the survey, consumers expect “financial institutions to accommodate them during widespread financial hardships, like the unprecedented inflation we are experiencing today. Seventy-nine percent expect flexibility on rates and fees, such as waiving overdraft or late fees, while 66% say they expect it to be easier to obtain new lines of credit.”
An additional 69% said notifications about lines of credit available to them and promotions on special rate offers, such as low interest balance transfers, are also expected during times of financial instability.
The Specifics
According to Vericast, the survey found:
- There is a correlation between mental wellbeing and banking. Seventy-five percent of consumers said the amount of money in their bank account impacts their mental health. For this reason, almost half (48%) are prioritizing building their savings account in 2022, the company found.
- Mobile banking, interest rates and sign-up incentives factor into choosing a financial institution. Sixty-one percent of consumers surveyed selected mobile banking capabilities as one of the top factors influencing their choice to bank with a financial institution.
Vericast added that when asked what would persuade them to switch financial institutions, two-thirds noted better interest rates as well as incentives to open an account, such as a cash reward for signing up, while 68% said fewer fees would incentivize switching.
- Financial priorities for 2022 show opportunity. Amid market volatility, building up savings (48%), paying off debt (47%) and investing directly in stocks (21%) are top financial priorities this year.
The survey further found only 12% plan to open a new checking account this year, and only 19% anticipate opening a credit card; for over half of consumers, it has been five years or more since they last opened a bank account.
“There are opportunities for financial institutions to generate business: nearly half (42%) of consumers are planning to buy a car in 2022 and 34% are planning to remodel their homes,” Vericast reported in its analysis.
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