Study: Community Financial Institutions Out of Touch With Millennial Needs

AUSTIN, TX--(Marketwired - May 14, 2015) - Fully 38 percent of Millennial consumers* who don't currently have a checking account at a community financial institution (CFI) say they want to use credit unions or community banks but those institutions lack the products they need, according to a new study.

The 2015 Consumer Banking Insights Study -- commissioned by BancVue on behalf of nearly 300 CFIs offering its Kasasa® brand of checking accounts and conducted online by Harris Poll in January 2015 among more than 1,000 U.S. adults (ages 18 and up) -- found that 3 in 5 Millennials (61 percent) would rather bank at a CFI than one of the big national banks if all else were equal.

However, the study found that Millennial consumers are more open than other generations to switching to a CFI. Fully 41 percent of Millennials who don't already use a CFI say they're at least somewhat likely to switch to one in 2015, compared to just 16 percent of 35 to 54 year olds and 14 percent of those 55 and up.

"Think about what a huge opportunity that is: many Millennials who aren't using a CFI are thinking about switching to one this year," said Gabe Krajicek, BancVue's CEO. "If any institution is on the fence about which generation to target, these numbers make it exceedingly clear."

Among Millennials with checking accounts, 51 percent use a big national bank as their primary bank, while just 29 percent use a CFI. Nearly a quarter of Millennials (22 percent) who do not have a checking account with a CFI say they don't use a local community bank or credit union because they don't know the advantages.

"Millennials will overtake Baby Boomers as the largest living generation in the United States this year, and the $600 billion they contribute to the economy each year is transforming financial services," Krajicek said. "The study shows, though, that CFIs aren't doing enough to get in front of Millennials and meet their needs."

Rewards, cash back, and technology are key for this generation. Among Millennial consumers, nine in ten say cash back options (91 percent) and rewards (91 percent) are at least somewhat important factors when choosing a bank. Access to a mobile or online personal financial management platform, in which they can monitor all of their finances (i.e., credit cards, loans, bank accounts) in one place, is at least somewhat important to virtually all Millennial consumers (94 percent).

Convenience and location are also important to many Millennial consumers. They are more likely than older consumers to say it's valuable to bank at an institution nearby (86 percent vs. 74% age 55+). More importantly, 88 percent of Millennials would prefer to do at least some banking in person, with 42 percent specifying they would like to receive financial advice in person.

"Millennials want the personal service and attention that CFIs are known for," Krajicek said. "If CFIs can also offer the products, technologies and convenience this generation needs, they'll have a much better chance of attracting and keeping Millennials' business."

About the Consumer Banking Insights Study
Over 280 community banks and credit unions teamed up with Kasasa to conduct the second annual Consumer Banking Insights Study, which was executed online by Harris Poll from January 5-9, 2015. The study polled 1,002 U.S. adults ages 18 and up to gauge their banking and checking preferences, feelings and behaviors.

Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

*"Consumers" are defined as U.S. adults who have a checking account at a financial institution.

About BancVue
BancVue^® is the innovative leader in branded, community-powered banking products proven to drive profit and growth for community financial institutions. Their flagship Kasasa^® suite provides a comprehensive strategy that integrates breakthrough products with world-class marketing and unprecedented access to training, compliance, research, support resources, and customized consulting. This full-circle approach gives local institutions the power and resources of a national product brand that enhances their unique, existing brand and service advantage. With nearly 750 clients, BancVue is helping community financial institutions thrive even as the industry landscape presents new challenges and competitors. Learn more at BancVue.com.