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Kiran | Branch Workforce Evolution White Paper

Why Gen-Y Opens Accounts In Branches And Not Online

Financial marketers often assume Gen-Y is the most likely segment to open checking accounts online. Turns out that’s not true, and here’s why.

By Rob Rubin, Managing Director, Novantas
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When a community bank recently decided to deploy an online account opening solution, their VP of marketing said their primary rationale was that this method was what younger consumers preferred. This is a reasonable assumption, because young consumers are indeed more digitally-centric than older segments of the population. But…

There’s an adage about online buying behavior: Consumers are only comfortable purchasing products or services online that they completely understand. And the reality is that many younger consumers shopping online for banking products have little- to no experience with banking products. A survey among checking account shoppers on FindABetterBank found that those under 30 were 30% more likely to say they didn’t have a checking account. It is this lack of experience that pushes many Gen-Y consumers into branches to open accounts. Checking account shoppers ages 30 to 39 are actually the group most likely to open accounts online. They want to save time, understand the products and are digitally-savvy enough to do it.

( Read More: Checks Die While Online Thrives, But Gen-Y Still Use Branches )

Alogent | Software Innovations for Banks & Credit Unions

Gen-Y Consumers Aren’t The Most Likely to Open a New Checking Account Online

Base: 1,189 checking account shoppers on

Base: 1,189 checking account shoppers on

Insights & Takeaways

Consumers of all ages are willing to open accounts online, but they must first have an understanding of the product category gained through first-hand experience. Once consumers are familiar with a particular type of product, they will be comfortable using technology to save time.

To help bring more young consumers over the finish line, banks and credit unions should:

  • Put live chat on category and product pages. Young consumers are comfortable with using chat. Live chat could help address questions that someone might otherwise visit a branch to ask.
  • Post customer reviews. For consumers that have grown-up shopping online, reviews help make shoppers feel comfortable moving forward.

Please visit Novarica for more information on consumers’ bank channel preferences.

Insights from Rob RubinRob Rubin is Managing Director of Novantas Data Services. His research leverages insights captured from thousands of bank shoppers every day while they are actually thinking about- and in the process of shopping for a new bank.

All content © 2017 by The Financial Brand and may not be reproduced by any means without permission.

Digital Banking Report | 2017 Marketing Trends


  1. Generally speaking, understanding security issues with Gen Y is another large concern with the Gen Y group and online account opening. I think that needs to be taken into consideration with these types of reports. Additionally, the Gen Y consumer isn’t as apt to older generations to blindly do what the rest of the sheep are doing… so to speak. There is a clear definition of “independence” and “individualism” that inherently brings skepticism among Gen Y consumers. That “human touch” will always be relevant and necessary for all walks of life, we crave it, want it and when you begin a financial “relationship” with a FI, consumers often want to know “who” their money is going to. Think online account opening is scary, you can now email money with Google wallet…

  2. Tim Bunch says:

    This article may be overlooking one large factor: Account Funding. When opening an account online, you still require a funding source. If you don’t have an account anywhere, it can be difficult to fund the account for opening. Therefore, anyone without a current account will be much more likely to open it in person. Combining that with a large demographic without a current account, and you have a recipe for a branch visit.

  3. You always open your first accounts in person. Then move to online after you have something to transfer and you start saving and getting serious about life.. Everybody still needs a regular bank in their town to go to. It is just what you do to feel connected and to make where you are feel like home. You’ve planted a flag so to speak.

  4. Great insight. I second Tim’s comment as well. If you are moving from a cash system to your first checking account, the branch is the way to go at this point.

  5. Alex Johnson says:

    This just goes to show that you really can’t pigeonhole your customers. In fact, you may risk alienating many of them with this attempt. What about the mom of two young children, in her mid-thirties, who works full time and volunteers at school functions? How about the forty-something who works twelve hours a day and likes to spend his weekends out of town fishing? Neither of these banking customers would be considered Gen Yers. Chances are they have a good understanding of how checking and other accounts work and they have far less time to spend on branch banking. Generalizations about a certain group of customers based solely on their age or affinity for mobile technologies are dangerous and should be considered with caution.

  6. “It is this lack of experience that pushes many Gen-Y consumers into branches to open accounts.”

    Could the fact that many banks and credit unions do not do a good job helping digital consumers through the buying cycle? According to Forrester, only 14% of content is aligned to the buying process.

    This is why it is important to audit and analyze your digital journey and the defined paths you want consumers to take. Take a look at your checking account pages on your web site and mobile device. Step outside your credit union or bank mindset and Is it easy to understand the account options or what a consumer gets with each account? If you have 5 different checking accounts, could you make it 2 accounts?

    Simplify the solution to consumers challenges. The live chat note above is a great idea. Furthermore, being proactive with chat sessions could also help with conversions. This however takes a digital sales mentality that many banks and credit unions do not have yet.

    Also, what if instead of displaying account features, flip the experience and offer a survey like experience allowing them to digitally profile themselves to get exactly the account that fits their needs.

    Plus, if done correctly, you could capture basic contact information to nurture this lead over the next 30-45 days. According to research from Google, the majority of consumers make checking account purchase decisions at least one month in advance. Furthermore, Google shares bank shoppers on average use 8.9 sources of information to help them make their decision.

    With this insight, during this time, an automated drip nurturing program could be used to digitally build a relationship with a potential lead. Some of the content used could include ratings and reviews of your checking account product from other consumers or members.

    Tim and Jason do make great points about the challenges of funding an account when one has no account to fund from.

    Never the less, a strong digital experience that is optimized for lead generation can help increase the number of leads for loans and accounts. Razorfish consumer research notes that, “Digital experiences create customers. The overwhelming majority of consumers who actively engage with a brand in digital fashion are much more inclined to purchase products and recommend the brand to others. 65% of consumers say that a digital experience, either positive or negative, changed their opinion of a brand. Of those, 97% said that their experience influenced whether they eventually purchased from the brand.”

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