Generational differences and their impact on the future of banking

Every day, a new type of financial technology seems to shake up the world of banking. And with the release of enhanced services like peer-to-peer (P2P) platforms, mobile payment apps or digital wallets, banking takes a major turn away from traditional branch services. Although these technology offerings and advancements can be frightening for financial institutions, they also create opportunities for those financial institutions that are willing to embrace new digital solutions that better serve the needs of their customers.

And the good news is that credit unions have not ignored the innovations shaping the financial industry. According to a recent survey conducted by Harris Poll on behalf of CSI, 86 percent of consumers somewhat or strongly agree that they are happy with the digital offerings available from their financial institution. Even more impressive, nearly half (47 percent) of all respondents indicated that they strongly agree that their financial institution provides the digital offerings they expect.

Reaching Younger Consumers with Online Services

While the amount of consumers who are satisfied with their credit union’s digital services is impressive, that same statistic also suggests that the other half of your banking customers are looking for more. This could be a result of younger generations, like millennials, expecting innovative products and demanding sophisticated mobile experiences.

The survey offers additional insight regarding the technology preferences of millennials and Gen Xers (generally age 35-54). For instance, both generations stand out as being slightly less satisfied with their credit union’s digital offerings (82 percent and 84 percent, respectively) than older consumers. In addition, while the survey found that 12 percent of all consumers strongly agree that they plan to use mobile wallet technology in the next six months, nearly 1 in 5 consumers (19 percent) age 18-34 are planning to use it.

What’s more, 58 percent of both millennials and Gen Xers said they would be willing to bank with an online-only financial institution. This willingness underscores the importance of credit unions continuing to build their digital banking portfolio to attract and retain younger customers.

So, while millennials are the most sought-after and talked-about generation due to their inherent growth potential, the survey reveals that other generations, especially Gen Xers, should not be taken for granted. If anything, credit unions should capitalize on the opportunity to attract consumers of all ages with enhanced mobile offerings. By providing training programs and informing banking customers of your latest online services, credit unions can change behaviors and create more meaningful, profitable relationships.

Building Innovation with Safety in Mind

After hearing the horror stories of widespread data breaches at retailers and other service providers, consumers still have faith that their financial institution can ensure that their money and personal information remains secure. This is a reassuring nod to credit unions’ ongoing data-security efforts. In the survey, 78 percent of all consumers said that they are confident their financial institution can protect their confidential personal information from identity theft and hackers.

Even more encouraging, 79 percent of millennials expressed confidence that their financial institution could protect their personal information, as did 81 percent of individuals age 55 and older. Conversely, in terms of payments security, millennials are not as confident in EMV technology as are other generations: Only 75 percent of millennials believe that chip cards are more secure than mag-stripe cards, while 83 percent of consumers age 45-54 and 86 percent of consumers age 55-64 have faith in the security of EMV advancements.

Turning Data into Decisions

With so many advances in technology and the expansion of digital services, it’s more important than ever for credit unions to develop a keen understanding of consumer attitudes toward these changes. This is self-evident in CSI’s findings: consumers overwhelmingly say that they want financial institutions to understand their needs and provide services that address them.

Credit unions should consider how they can use specific consumer preferences, as uncovered by the 2016 CSI Consumer Survey Report, to their advantage. Without a doubt, online services will continue to be a focus area for consumers and credit unions alike, as will data security. Your strategy will be your own—but its success will depend largely on your ability to engage consumers of all ages and deliver the services and experiences they expect.