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Alternative Banks Appeal to Younger Generations: Report

A survey from Accenture looks at the banking habits of those between the age of 18 and 34.

Forty percent of North American bank customers would switch to a online-only bank, while nearly that many say they would be comfortable banking with a technology company, according to a survey from Accenture.

The consulting company polled nearly 4,000 retail bank customers in the United States and Canada on their banking habits. The survey found that 39 percent of customers 18 to 34 years old would consider switching to a branchless bank, compared with 29 percent of customers between the ages of 35 to 55 and 16 percent of customers over 55.

The survey also found that significant percentages of consumers — particularly younger ones — would be open to banking with technology players such as Google, Amazon and Apple if those companies were to offer such services. The survey founded that 72 percent of consumers age 18 to 34 would be "likely" or "very likely" to bank with at least one technology, telecommunications, retail, or shipping/postal company that they do business with if they offered banking services. More than half (55 percent) of consumers age 35 to 54, and 27 percent of those ages 55 and older said the same.

Further, younger consumers were also more likely than older consumers to want their banks to offer more services and solutions to help them with financial management and purchases, the survey found. Fifty-five percent of respondents age 18 to 34 said they would like their bank to help with the process buying a car and provide discounts in that process. Fifty-seven percent said they would welcome more help from their bank in the process of purchasing a home.

The younger age group also expressed the most interest in PFM and budgeting services such as "safe to spend" forecasts.

"Tomorrow's consumer is coming of age with a very different perception of what a bank could be," said Wayne Busch, managing director of Accenture's North America Banking practice, in a statement. "Those expectations could become profoundly disruptive to banks if non-bank entrants gain momentum and banks fail to adapt quickly. This will have important implications for the 'digital generation' spanning nearly all age groups."

[Related Content: Social Media And The Next Generation Of Lending Customers]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Byurcan
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Byurcan,
User Rank: Author
5/27/2014 | 5:29:45 PM
re: Alternative Banks Appeal to Younger Generations: Report
Very true Bob, this demographic is more tech-savvy and focused than any other.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
5/27/2014 | 4:21:08 PM
re: Alternative Banks Appeal to Younger Generations: Report
Thanks for that info Bob. It's fascinating how much younger customers are willing to completely forgo the banking model that their parents are still very loyal to. It's like everything that banks have learned from marketing to previous generations has to be rethought.
bob_graham
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bob_graham,
User Rank: Apprentice
5/27/2014 | 4:17:28 PM
re: Alternative Banks Appeal to Younger Generations: Report
We see interesting data points with this generation. Another data pont from that study is that Banks could lose up to one third of market share to digitally oriented competitors or non
banking competitors by 2020. This is driven by Millennials loyalty or lack therefore to traditional bank brands as well as their desire for top technology related products and conveniences
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