As new data continues to be released on how financial institutions can best position themselves to attract the millennial market, a recent study from Saylent found that members of Generation Y place a high importance on being able to manage their own money.
Saylent’s report revealed that 56% of millennials would be willing to leave their current financial institution in favor of an account that doesn’t automatically pay for overdrafts and then charge a fee.
“This indicates that millennial consumers prefer to have control over their funds, and offering a product which does not include overdraft fees can be a point of differentiation,” the report said.
Additionally, while all demographics wanted mobile banking capabilities, Saylent found that three times as many millennials preferred to manage their money via mobile channels.
Much of those findings are good news for credit unions, many of which offer robust mobile channels as well as the option—but not requirement—of overdraft protection.
But a recent study from J.D. Power & Associates could raise some red flags about the next demographic wave—Generation Z.
According to the J.D. Power study, available here, consumers age 20 and younger were happier with and had more positive feelings toward the big banks than regional and mid-size FIs. These consumers—Gen Z, or consumers born after 1995, according to J.D. Power—gave the big banks an average satisfaction rating of 807 out of 1,000.
While the study only examines the for-profit banking sector, it does include insights relevant to credit unions, including that these consumers’ branch usage is on par with Gen X and Gen Y—an average of about once per month for all three demographics.
Gen Z also values product offerings, ATMs, branches, mobile channels and the websites of the big banks, though that could imply that this demographic is merely unfamiliar with what credit unions offer in those fields.
On the plus side, the study found that Gen Z were strongly likely to be advocates for their financial institution if they were highly satisfied with it—a factor which is crucial to credit unions, since so many CUs rely on word of mouth promotion. Additionally, smaller and regional banks are capturing a greater share of Gen Z customers than they are with Gen X, despite lower satisfaction rates.