Apiture Study Identifies Consumers’ Top Motivators for Switching to Community Financial Institutions

Chris Cox

Apiture, a leading provider of digital banking solutions, today released a new white paper, Battling the Big 4 Banks: Strategies for Community Institutions to Win Across Generations, the second report in its Banking Through the Ages series. Based on a survey of more than 2,000 U.S. consumers conducted with market research and analytics company The Harris Poll, the study finds that although 66% of consumers consider a large bank their primary institution, about half are open to moving to a smaller institution, including community banks (50%) and credit unions (45%). 

According to the study, top factors for large bank customers to switch to a smaller provider include better interest rates (54%), lower fees (49%), and more personalized and responsive customer service (28%). 

As community financial institutions continue to compete with national banks, the report notes the growing importance of digital banking, with 63% of consumers agreeing that their financial institution's digital banking capabilities are more important day-to-day than physical capabilities, such as branch locations. While this is particularly true for Gen Z (72%) and millennials (67%), a majority of older consumers have also embraced digital, with 65% of Gen X and 57% of boomers stating that digital channels are more important than physical capabilities. 

Additional findings include:

• Switching motivators differ by generation: Traditional incentives resonate with older consumers, such as lower fees (54% of Gen X) and access to nearby branches (50% of boomers), whereas Gen Z prioritizes personalized digital experiences (33%) and authentic, ethical practices (28%).
• Interest rates drive consideration: Across age groups, better interest rates are the top motivator for switching to a smaller financial institution, cited by 54% of respondents.
• Always-on digital banking and exceptional customer service are key: Online and mobile banking availability (52%) and exceptional customer service (51%) rank highly as motivators for consumers when selecting a financial institution. 
• Branch strategies should be evaluated: Consumers would rather have 24/7 customer support (34%) and a modern, easy-to-use mobile app (30%), than a physical branch location. 

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“Community institutions have a unique opportunity to attract a diverse range of customers by focusing on a mix of digital and strategic in-person offerings that align with consumers’ values,” said Chris Cox, COO of Apiture. “Our study underscores the value consumers place on highly personalized, authentic, and accessible banking options, which community banks and credit unions are well-positioned to provide.”

For strategies on how financial institutions can attract and serve customers of all generations, download Battling the Big 4 Banks: Strategies for Community Institutions to Win Across Generations here.

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