The Age Divide in Banking Channel Preference
By Dan Geller
Our latest consumer research report, “Growth and Revenue Potential of Emerging Financial Services,” reveals that banks and credit unions are leaving fee revenues on the table. Part of what we uncovered is that different consumer age groups want different channels to do their banking. This opens up new possibilities for banks and credit unions looking for new strategies to attract and retain customers using mobile banking and internet banking.
This article was written by Dr. Dan Geller, who conducted the research, for BAI Banking Strategies discussing how age does matter when it comes to developing new customer channels:
One of the main factors financial institutions should consider in planning their mix of channels, such as the branch network, online banking and mobile banking, should be the age group of their customer base.
The latest consumer study conducted by MRI clearly shows a link between age group and a choice for banking channels; younger consumers gravitate towards digital banking, while older ones prefer traditional branch banking.
The study found that only 24% of Gen Y consumers, identified as those between the ages of 18 and 35, indicated a branch as their preferred banking method. Gen X consumers, who are between 36 and 46 years old, follow that pattern closely, with only 25% using a branch for their banking services. Conversely, 38% of consumers aged 67 or over, and 31% of baby boomers, who are between the ages of 47 and 66, do so, generating a variance of nearly 14% between Gen Y and the oldest group.
The inverse can be found when it comes to online banking. The majority of Gen Y, 69%, and Gen X, 68%, use online banking as their preferred banking channel, while only 61% of mature age and 65% of baby boomers do so.
When it comes to mobile banking, which is still a relatively a new banking channel, the picture is very similar. The youngest group of consumers, Gen Y, has embraced mobile banking as their preferred banking channel to the tune of 6%, followed by Gen X at 4% and baby boomers at 2%. Not surprisingly, none of the mature age participants in the study indicated a preference for mobile banking.
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