Are Millennial Men Better Banking Customers Than Millennial Women?

Imagine that there were only two people who weren’t already customers (or members) of your financial institution bank (FI), and that you knew that, in the past year, Consumer A has:

  • Referred more friends and family to his or her primary FI than Consumer B has.
  • Added more products with his or her primary FI than Consumer B has.
  • Paid more fees to his or her primary FI than Consumer B did.

Which one of the two would you want as your customer or member? I’m guessing you said Consumer A.

In the real world of consumers — and more specifically, Millennials — Consumer A is a lot more likely to be a man than a woman.

Banking Differences Between Millennial Men and Women

The banking industry has been bombarded with research and opinions over the past decade about the importance of marketing to women. Regardless of the specific findings of these studies, their purpose is to exhort financial institutions to focus their marketing efforts on women.

Generally, I’ve agreed with this prescription, although I’ve taken issue with some of the generalities. But recent research I conducted has caused me to question some of the conventional wisdom regarding genders in banking, specifically regarding Millennials. The research uncovered that Millennial women and men differ in terms of:

  1. The type of bank accounts they have
  2. Who they bank with
  3. Their banking-related referral and account growth behavior
  4. The types of fees they pay

In addition to inquiring about referral activity, I asked survey respondents what types of banking products they added in the past year with the institution where they have their checking account. If they added non-deposit products like a credit card, loan, or investment account, I considered them to have grown or expanded their relationship with their primary bank of credit union.

Regarding these two desirable customer traits — making referrals and adding new products — behaviors differ among:

Younger Millennials. Among Younger Millennials (those between 21 and 29 years old), two-thirds of men referred family or friends to their primary institution in the prior year, in contrast to a little more than half of the women. In addition, compared to Younger Millennial women, twice as many men grew their relationship with their primary institution adding non-deposit products (52% versus 26%).

Older Millennials. Among Older Millennials (between 30 and 37 years old), the pattern was consistent. A little less than half of the women provided referrals versus nearly three-quarters of the men. And again, twice as many men added non-deposit products in the past year (60% versus 30%).

Generation Gender Referred
Younger Millennials
Female 52% 26%
Male 67% 52%
Older Millennials
Female 47% 30%
Male 73% 60%
Gen X
Female 44% 22%
Male 45% 31%
Female 33% 18%
Male 31% 22%

( Source: Cornerstone Advisors survey of 2,015 US consumers, Q3 2017 )

These findings contradict previous research, and much of the conventional wisdom held by many in the industry. One article claimed that:

“Women have a higher propensity to share experiences, and act on the recommendations of peers and friends. Thus, women are an important source of referrals.”

This might be true in general, but according to my research, fewer Millennial women tell people about their banking experiences than men do. Is it because women are less satisfied with their banks than men?

The data doesn’t suggest that. Roughly seven in 10 Younger Millennial women profess some degree of loyalty to their primary financial institution — 55% say they’re very loyal, and 14% say they feel no need to look around or switch. Among Older Millennial women, it’s about six in 10.

Younger Millennials
Older Millennials
Which statement best describes your relationship with your primary financial institution? Female Male Female Male
I’ve had my checking account there a long time and I’m very loyal to them. 55% 48% 44% 54%
I’ve had my checking account there a long time, but wouldn’t call myself a loyal customer. 20% 31% 22% 28%
I’ve had my checking account there for a while, and feel no need to look around or switch. 14% 8% 15% 9%
I’ve had my checking account there for a while, but if a better offer came along, I’d consider switching. 6% 10% 12% 7%
I recently switched or opened a checking account there. 6% 3% 7% 1%

( Source: Cornerstone Advisors survey of 2,015 US consumers, Q3 2017 )

Managing Relationships Differently

There are a host of possible explanations for the behavioral differences:

  • Maybe women are less confident about their financial decisions, and therefore less likely to make referrals to their friends and family.
  • Maybe men care more about financial services and therefore provide referrals.
  • Maybe women are better, more careful shoppers and find the best providers for each of their product needs.
  • Maybe men are slightly dumber than a dog, and don’t shop around, and pay too much in fees (hey, don’t get on my case for this insult–it was a female comedian who said that).

Whatever the reasons, banks and credit unions should:

  1. Question the conventional wisdom about gender differences;
  2. Understand the gender behavioral differences among their own customers/members; and
  3. Develop better loyalty metrics, and apply those metrics to various segmentation dimensions.

For more insights into this research, download the white paper Reinventing Checking Accounts here.

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