By Jennifer Dimenna, SVP of Enterprise Partner Management
The financial landscape is preparing to shift as baby boomers pass on an estimated $72 trillion to younger generations. In the U.S., large banks holding the majority of Americans’ accounts are positioned to benefit the most from this “Great Wealth Transfer”—but community and regional institutions who deliver the digital banking experience that Gen Z and millennials demand can win their share of this important segment.
Attracting the Youngest Consumers
Today, 79% of Gen Z and 69% of millennials have chosen a large bank as their primary financial institution. However, according to a recent study from The Harris Poll commissioned by Apiture, about half of younger consumers with a primary large bank relationship are open to switching to a small institution, including a community bank (52%), online-only institution (50%), or credit union (47%).
As digital natives, Gen Z and millennials gravitate to online and mobile banking and rarely use branches for their financial needs. In fact, according to the study, nearly half of Gen Z and millennials don’t remember the last time they visited a branch.
With 84% of younger consumers saying the ability to complete banking activities and access finances digitally is non-negotiable, developing a comprehensive digital strategy that addresses Gen Z and millennial habits and preferences is essential to gain—or keep—a primary banking relationship with them.
What Banking Features Do Young Consumers Want?
Integrating the features that Gen Z and millennials use most frequently is essential to establish loyalty, and the user experience must be modern and intuitive. Almost three quarters of Gen Z and millennials frequently use peer-to-peer instant payment services, transfer funds between accounts, and employ budgeting and expense tracking tools. In addition, more than half of younger consumers regularly monitor their credit score. To appeal to this demographic, financial institutions should prioritize adding these key features to the digital banking mix.
Explore Emerging Technology
Likewise, emerging digital technology such as digital wallets and wearables is growing in importance for younger consumers. It’s not enough to simply provide access to banking services through online and mobile channels—digital solutions must be available on the channels that younger consumers expect.
Embrace the Opportunity to Innovate
As your financial institution prepares for the impending Great Wealth Transfer, ensuring that your digital strategy appeals to younger generations is essential. Embracing the preferences of younger consumers will not only attract them to your institution but will also help to ensure your long-term growth and stability.
To discover more about generational preferences and how to incorporate these insights into your strategy, view Apiture’s latest white paper, Attracting Gen Z and Millennials: Seven Essential Strategies for Community Banks and Credit Unions.
