As technology advances, day-to-day banking habits have evolved to embrace new tools and streamlined processes. Many financial institutions, from banks to credit unions, have come to us wondering what these new habits and preferences look like within their own community. They want to know how they can best meet the moment to convince prospective consumers to pick them, and current customers to stay with them.
Over the last few years, Market Street Research has conducted a dozen different financial studies with consumers to pinpoint needs and perspectives around banking.
Here’s what we’ve found:
Consumers pick a bank depending on how well it delivers value; and (most of) what consumers value changes with age.
- Among the younger generations, banking value comes from digital capabilities. These consumers care about functionality and efficiency first and foremost, which is why they’ve leaned into the digital banking experience. They’ve grown up in a largely digital age and are used to the efficiency (and non-interactive nature) that comes with doing everything virtually.
- Older consumers care most about the quality of customer service.
And “great service” doesn’t necessarily mean a personal relationship or even an in-person interaction. Quality customer service is defined by responsive, competent, and human customer support. This generation tends to require more hands-on guidance and are easily put off by brands that don’t allow any opportunity for human interaction to help address their needs.
- What crosses generations is a desire for the banking experience be so effective that it doesn’t require much thought or effort. Whether it’s happening online, over the phone, or in person, consumers’ desire for banking to be so effortless that they don’t have to think much about it (or spend much time on it) is something everyone wants. And this comes as a surprise to many of our clients! They’ve focused a lot of time and energy on creating meaningful relationship to customers, when what those consumers really want is for the bank to be nearly invisible–there when you need it but otherwise an afterthought.
This is why knowing your audience demographics is key to meeting their specific needs. It’s not practical to focus on one age group or another (depending on your location and context) because chances are you have bankers of all ages and you need to be able to meet them where they are in that moment. And remember: no matter a consumer’s age, keeping their required engagement to a minimum is key to delivering value.
“I’m 58, I like the idea of walking into a bank and everyone knows me… as I got older I understand the value of service, it wasn’t just about rates anymore” [Male, 58].
Digital banking is a non-negotiable.
Our research showed that consumers are conducting up to 90% of their banking through digital tools, and many are “on the bank app every day.” When we asked what it means to make banking “more convenient,” most referenced intuitive, user-friendly digital tools and universal accessibility across devices for day-to-day banking activities like online bill pay, mobile deposit, and easy account transfers within same bank and to other banks. This is why a suite of easy-to-use digital features, including a great mobile app, is a must for banks.
Nevertheless, access to a physical branch is still a priority for consumers of all ages.
Across numerous banking studies we’ve seen that access to a physical branch is among consumers’ top 3 priorities when choosing a new bank (if not the #1 priority) – and this is true even among younger consumers. Why? Consumers prioritize a frictionless experience most of all. Consumers dislike spending time traveling to the bank, whether it’s to make large deposits or withdrawals, open or close an account, and manage other account logistics. So, when they do need to make the trip, having a branch close by makes all the difference.
The importance of proximity applies to ATMs just as much as physical branches.
Consumers care more about having access to an ATM close by than the overall size of the ATM network or paying an occasional fee to use out-of-network machines. Those who prioritize ATMs in choosing a bank said that it was important to have ATMs that are convenient to daily life (close to home, work, or frequently used travel routes). While paying fees for using out-of-network ATMs is, not surprisingly, undesirable, consumers are open to doing it occasionally (or while traveling) if they know there’s a fee-free ATM they can access on a regular basis.
“It’s nice not to pay the same fee over and over at the same ATM, but a one-off [fee] is not a big deal” [Male, 26].
At the end of the day, consumers want access to physical branches because they fear that quality troubleshooting and support won’t be available another way.
Despite the rarity of in-branch banking, consumers really care about convenient branches. 1 in 5 of the bankers we spoke with prefer connecting with customer service in-person if they have a concern, because they see their physical branch as a safety net. If consumers have a problem, they want to know that they CAN go to a branch and talk to a teller face-to-face who can solve their problem. This is true across age groups.
“Branch convenience is important because they’re holding my money, it’s important to be able to reach someone in my time of need” [Female, 38].
“Being physically close to the bank is important. It was so frustrating to call all the time because I want to be able to just go down there to talk to someone” [Male, 50].
At Market Street Research, we work with financial institutions that prioritize people over profits. By exploring member needs and small business challenges, we help credit unions and community banks develop services that truly support financial wellness, drive local economic prosperity and support growth for the institution and the local population.
To learn more about our approach, contact us for a consultation today.