Among individuals who would not consider opening a checking account with a local financial institution, the top reason given (56 percent) is limited branch and ATM locations.
In addition to a lack of branch or ATM location, a recent consumer study commissioned by Austin, Texas-based Kasasa and conducted online by The Harris Poll, revealed that a lack of up-to-date technology is another deterrent for opening an account at a local financial institution, with 22 percent of those who would not consider going local for checking accounts citing this as a factor. Modern technology appears to be most important to millennials (ages 24-38), with 28 percent of those who wouldn’t open a checking account with a local institution citing lack of modern technology compared to 18 percent of Gen X (ages 39-53) and 14 percent of baby boomers (ages 54-74).
Also, inferior product offerings are the third most common reason for not selecting a local financial institutions for checking account needs at 21 percent. In fact, 51 percent of Americans believe local financial institutions do not have the resources to offer the level of innovative, user-friendly products that national megabanks or online-only banks do.
While this study reveals the primary hesitations consumers have with choosing a local community bank or credit union, most seem to prefer them over megabanks (55 percent would consider a local financial institution to open a new checking account compared to 29 percent who would consider a national megabank). This underscores the importance of delivering and effectively communicating to prospective customers and members accessibility of branches and ATMs, along with innovative, technology-driven products.
“The idea that community financial institutions don’t offer the same products as megabanks is just not true,” said Gabe Krajicek, CEO of Kasasa. “Kasasa was created to help community banks and credit unions compete aggressively with megabanks by offering products that are innovative, convenient and free to consumers. Local financial institutions must use their combined voice to make it known that they are offering similar, if not better, products than megabanks. This is now we will take back banking.”