Half of Gen Z and Millennials Open to Switching Primary Financial Institution to a Community Bank, Online-Only Bank, or Credit Union, New Apiture Study Finds

Jennifer Dimenna

Apiture, a leading provider of digital banking solutions, today released key findings from 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 80% of Gen Z and 75% of millennials have chosen a large bank as their primary financial institution, roughly half of younger consumers are willing to switch to a community bank (52%), online-only institution (50%), or credit union (47%). 

Apiture reports this and other findings in Attracting Gen Z and Millennials: Seven Essential Strategies for Community Banks and Credit Unions, the first paper in its Banking Through the Ages series. The paper identifies important generational differences in consumers’ banking habits and preferences that will help smaller financial institutions better attract and serve young, digital-native consumers. 

Key findings include:

• Younger consumers are least likely to choose community banks: Only 6% of Gen Z and 8% of millennials consider a local bank their primary institution. Credit unions have captured 14% of Gen Z and 20% of millennials, while 11% of Gen Z and 18% of millennials have an account with an online-only institution.
• Physical locations are waning in importance: Despite 57% of Gen Z and 60% of millennials stating that branches are an imperative, 45% of these consumers do not remember the last time they went to a physical branch. Further, across generations, half of Americans would not change where they bank if their institution closed all its physical locations.
• Modern digital banking technology is critical for attracting young customers: 80% of Gen Z and 81% of millennials report that digital banking is at the core of their banking preferences, and 53% of Gen Z and 51% of millennials identify it as a top need for choosing a new institution.
• Digital account opening is an imperative: Financial institutions need to meet young customers where they are — online. While many institutions still require a branch visit to open an account, 41% of Gen Z and 38% of millennials consider the ability to open an account online a top need when choosing a financial institution.

“The country’s largest banks are winning across generations. Our research with The Harris Poll reveals critical insights for banks and credit unions competing with national brands to capture a larger share of the vital Gen Z and millennial demographic,” said Apiture Chief Operating Officer Chris Cox. “Apiture is committed to providing the industry-leading online and mobile banking solutions needed to attract and retain today’s most digitally savvy consumers.”

Apiture SVP of Product Jennifer Dimenna will discuss the survey findings and explore how financial institutions can gain a greater slice of Gen Z and millennial populations in a webinar hosted by Bank Director on June 18 at 2 p.m. EDT. To join the discussion, register now. 

To learn how community and regional banks can bolster their share of young adult account holders, download Attracting Gen Z and Millennials: Seven Essential Strategies for Community Banks and Credit Unions here.

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