Study Reveals What Gen Y Desires From New Banking Providers
When shopping for a bank, Gen Y adults look for mobile tools, rewards programs and brand names more often than older generations, a study finds.
The Consumer Banking Insights Study, conducted online in December 2013 among more than 1,000 U.S. adults ages 18 and up, found that Generation Y (18 to 34 years old) with a checking account are more likely to say mobile banking is at least somewhat important when choosing a bank (78%) than those in the 35-54 age group (66%) or those ages 55 and up (44%).
The report, commissioned by BancVue on behalf of the more than 200 community financial institutions offering its Kasasa brand of checking accounts, also found that members of Gen Y believe customizable rewards are important. 86% of those ages 18 to 34 say the ability to pick and choose rewards tied to their checking account are at least "somewhat important," versus 73% of 35-54 year olds and 63% of those ages 55 and up.
Gen Y also values cash back options. 88% say they are at least "somewhat important" vs. 74% for Gen X and 67% for Boomers.
A recognizable banking brand is also more important to Gen Y adults (81% say it’s at least somewhat important) than it is to those ages 35-54 (68%).
72% of Gen Y adults say banking locally is somewhat important to them. However, roughly one-quarter of Gen Y adults who have a checking account but not with a community-based institution (23%) say they don’t bank locally because they don’t believe a community bank or credit union can provide the same benefits they’re getting at their current bank. Additionally, 30% of these Gen Y consumers say they don’t use a community bank or credit union because they’ve "never thought about it." The data suggests that community financial institutions need to improve their product offerings, brand awareness and marketing efforts in order to attract the next generation of banking consumers.
"Gen Y adults are more likely to respond to brand name offerings," says Gabe Krajicek, CEO of BancVue. "With social media, endless searchable options and new non-bank players entering the banking space, the notion that the customer is king has never been more true than it is now."
"Attracting younger customers with rewards checking accounts and mobile offerings can help community banks and credit unions increase profits as well, by way of heightened non-interest income and increased account holder engagement and retention," said Krajicek.
