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Millennials Migrating Away from Large Banks

April 28 –  Millennials, consumers 18- to 34-years-old, overwhelmingly report being satisfied with their online banking experience at their primary bank (cited by 92 percent of millennial respondents), yet they also change banks more often than customers in other age groups, according to a new report on the banking industry by Accenture.

The report, titled “Banking Shaped by the Customer,” is based on a survey of more than 4,000 retail bank customers in the United States and Canada and is the most recent report in Accenture’s multi-year research on the banking industry. 

Nearly one in five millennials (18 percent) said they switched from their primary bank in the past 12 months, compared with 10 percent of customers aged 35-54 and only 3 percent of people 55 and older. 

The survey data indicate specific trends in millennial switching. Local/community banks are the biggest “winners” in attracting millennials with a 5 percent migration. Large regional or national banks are the biggest “losers” with a loss of 16 percent of this customer age group. What’s more, credit unions experienced
a 3 percent growth in new millennial customers.
 
Millennials point to high fees and poor loyalty programs as the top reasons for being dissatisfied with their banks. On the other hand, millennials say that they are most likely to stay with their current bank if online banking services are good.
 
The implication is that banks can’t rest on their laurels, and must do more to retain millennials as customers, said Accenture’s managing director Robert Mulhall.

“In 2015, as millennials overtake baby boomers as the largest living generation in the United States, they are becoming one of the most influential — and challenging — customer groups for the banking industry,” said Mulhall. “Not only are millennials more likely to switch banks, but many continue to migrate to online-only banks, which poses a significant risk for banks in the future.”

Millennials also have distinct preferences for how banking services should be delivered.  Two-thirds (67 percent) of them said that the traditional and digital banking experience they receive at their current bank is only somewhat or not at all seamless, and nearly half (47 percent) said they would like their bank to provide tools and services to help them create and monitor their budget.  Nearly half (48 percent) also said they would like their banks to offer video chat on their website or mobile/tablet application, compared to only 30 percent over 55.

 

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