Survey reveals bank loyalty is more easily shaken for younger generations, Netflix-like personalization is needed among all consumers and other key generational findings
NEW YORK, Sept. 9, 2020 – Zafin, a global banking software company making financial institutions more agile and efficient through its product and pricing solutions, announces the results of a survey exploring what U.S. consumers want from banks and evaluating generational preferences. The survey found that the resources banks offer during COVID-19 will greatly influence younger generations’ loyalty moving forward. The results also revealed that a highly personalized banking experience is crucial for both potential and existing customers across generations, with almost 90% of all respondents noting the importance of personalized banking.
The survey was distributed to more than 1,000 American consumers and evaluated what Gen Z, millennials and those near or at retirement age expect from their banks.
Across all generations surveyed, 88% of respondents believe it is important for their banks to provide recommendations relevant to them based upon their financial product usage and behaviors. Yet, nearly 50% of respondents said their current interactions with their bank are either not personalized at all or only slightly personalized.
Specifically, 41% of respondents stated their current banks do not proactively offer them products, bundles, pricing and other services relevant to their financial situation, needs and goals.
Incentives are another key aspect of personalized offerings. Financial goals, such as saving for a down payment on a house or paying down student loan debt, provide great opportunities for banks to reward their customers. For millennials in particular, incentives like these play a large role in their relationship with a bank. Almost 86% of millennials said that a program offering rewards for defining and achieving financial goals would lead them to either expand their relationship with their current bank that offers this program or switch to a bank that provides such a program.
For Gen Z and millennials, online and mobile banking capabilities are the most important factor when choosing a bank; whereas pricing (e.g., lower overdraft fees) is the most important factor for those near or at retirement age.
During the COVID-19 pandemic, most respondents (80%) agreed that their banks’ online and mobile banking capabilities are making banking easier for them. However, there are long-term implications of online and mobile banking preferences that will far outlive 2020. More than the other generations surveyed, Gen Z (66%) said they value online banking and mobile banking more now than they did prior to the pandemic. About 62% of millennials and respondents near or at retirement age agree. While many banks were forced to digitize in some way this year, the results show that the key to digitization success is longevity. Banks need modern systems to match this shift.
When it comes to COVID-19-related loyalty, the decisions banks make now will significantly sway younger consumers’ loyalty in the future. This is especially true for Gen Z, with 60% of respondents saying the resources their bank offers during the pandemic will play a role in their loyalty to that bank moving forward.
Personalized options, incentives and overall modernization are crucial to customer loyalty, and they could be the driving force behind Gen Z and millennials making the switch to a new bank. About 40% of Gen Z and 41% of millennial respondents have recently thought of opening a new account with a new bank, as opposed to 27% of respondents near or at retirement age.
“It’s widely known that the COVID-19 pandemic has accelerated the use of digital banking tools,” said Alexandra Roddy, CMO and EVP of partnerships at Zafin. “The biggest takeaway, however, is that many banks have not been prepared to match consumers’ desire for a more personalized banking experience because of their outdated legacy systems. This survey shows expectations have changed, and banks now have a massive opportunity to reevaluate how the systems they have in place may be holding them back from the modernization they know their customers want and need.”
View the complete survey data here.