CHICAGO–A better banking app would lead more than half of Millennials to move to a new financial services provider, according to new research that revealed a number of other findings, as well.
The 2017 BAI Banking Outlook research study, published by the Bank Administration Institute, probed consumers’ opinions on a variety of financial services topics that are top of mind for the industry.
According to BAI, the highlights of its BAI Banking Outlook report, a research study of 2,000 consumers across different generational segments and 556 financial services leaders representing organizations ranging in size from community banks to large mega-banks, include:
- Most new customers that financial services organizations gain are Millennials. Nearly 75% of millennials find a new primary financial institution (PFI) through website research or online ads, yet financial services organizations only designate about 33% of their advertising budget to digital channels.
- 70% of financial services organizations surveyed believe their banking applications meet the needs of their customers, but over half of Millennials said they would change financial services organizations for a better banking app.
- Person-to-person (P2P) platforms are becoming more relevant across all surveyed generations of consumers, but non-banks are the leading P2P platform providers. In the last 12 months, 93% of Millennials, 81% of Generation X, 62% of Baby Boomers and 49% of the Silent Generation used a P2P platform more than once, Bai said.
- Across generations surveyed (Millennial, Generation X, Baby Boomers and Silent), the number one reason why consumers choose their PFI is convenient branch locations, however, almost 50% of bankers reported that in-branch transactions have decreased over the past year. Additionally, Millennials surveyed said that incentives (18%), such as cash or gifts, is almost as important as convenient branch locations (25%), according to BAI.
“It is important for financial services organizations to thoroughly know their customers’ financial needs as they develop strategies. Without direct feedback, they may be missing the mark, and consequently, missing key opportunities for growth,” said Karl Dahlgren, managing director at BAI, in a statement. “Through our commitment to research, we bridge the gap between consumers and financial services organizations and drive the industry forward. We identify what consumers truly want out of their primary financial institution and compare it to what financial services organizations are seeing, experiencing and focused on developing.”