4 ways to keep younger consumers from leaving your FI for a fintech
Gen Z and Millennials still express a strong level of trust for banks and credit unions, but trust doesn't lead to loyalty anymore. Younger consumers are increasingly looking to fintechs for superior digital capabilities and cryptocurrency access. They're also quite willing to leave banks that don’t meet their standards for sustainability and diversity.
Fintechs have evolved from being an “existential threat” to traditional banks to being “the key to success” via partnering. In reality, both scenarios coexist. And while “partnering” is the more recent theme, the competitive threat, in many respects has intensified.
The Bank Administration Institute found this in conducting research into top banking trends and challenges. The organization uncovered a highly relevant fact: rapidly growing interest in cryptocurrency and high expectations around sustainability and diversity among younger consumers, combined with their natural preference for digital products, is increasingly luring these consumers away from traditional banks and credit unions and into the arms of fintechs.
BAI interviewed both banking leaders and consumers to learn how channel preferences and attitudes about banking are changing relationships. While older consumers may care more about interest rates and branches, and all consumers are sensitive to bank fees, Millennials and Gen Z consumers put much more value on digital capabilities and social issues and are willing to take their business elsewhere when a company doesn’t align with their values.
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