Understanding What Boomers to Gen Z Value to Super-Charge Deposits
Co-produced by Traci Mottweiler, Director of Growth Strategies at Allied Solutions and Greg Wempe, Chief Client Officer of Kasasa | November 8, 2019
All consumers have an opinion about the role a financial institution should have in their day to day lives. According to Kasasa’s latest consumer study1, younger adults appear to care less about whether their account is with a community financial institution and more about what they can get from that institution.
Fortunately, 85% of Americans believe community banks and credit unions are capable of satisfying the majority of their financial needs. Over half (55%) would consider opening an account at a community bank or credit union, but just 3 in 10 would consider a national bank.
While megabanks still have majority market share, the gap has shrunk, with 45% of Americans having accounts at national megabanks versus 43% having accounts at local community banks and credit unions.
Growing deposits is expected to get harder.
The findings above highlight the importance of understanding what consumers value so institutions can offer the right products and services, thus generating deposits – an increasingly challenging task. According to BAI, almost two-thirds of bankers said deposit competition increased over the past year. Over two-thirds expect it to increase in the next year.2
Deposit growth might not seem like it needs to be a strategic goal, but increased competition and future generations’ changing preferences could mean that financial institutions not strategizing on how to attract these consumers may lose out on their business by the time they are in the job market and in need of a place to deposit their money. Financial institutions must act now to understand the barriers to attracting more account holders, determine consumers’ preferences, and do what it takes to get their attention.
Click Here to Read the Blog: Uncovering Hidden Deposits in Your Market
Don’t let products and services be a barrier.
While the preference to bank locally exists, there are obstacles to overcome. Consumers’ top three reasons for not selecting a local bank are:
1. Limited branch and ATM locations
2. Lack of up-to-date technology
3. Inferior product offerings
Access appears to be a bigger issue among older generations. Gen Z and Millennials are about twice as likely as Gen X and Boomers to cite lagging technology as a barrier (39% and 28% vs.18% and 14%, respectively).
Full-service banking across digital platforms also seems to have a large impact on financial institution selection. Nearly 4 in 5 consumers cite digital access to all banking products as important. Other important offerings include good credit card offers (71%) and P2P payment options (63%).
Going beyond offerings, location is also key.
Consumers value more than just products. They also value location, with nearly 9 in 10 citing a convenient location as important. While more than half of Americans (54%) say they are comfortable using an online-only financial institution, more than 4 in 5 also say having a physical location is valuable.
Roughly two-thirds of Americans say banking locally is important. However, generational differences are apparent, with Gen Z least concerned about banking locally and Boomers most concerned with it.
Offer innovative products and close the awareness gap.
Consumers are clear that a financial institution – big or small – that can meet all their financial needs will win them over. This is critical as community banks and credit unions compete for deposits.
The good news is, as compared to local financial institutions, Americans are generally more likely to associate megabanks with negative attributes than positive ones. The one exception: product innovation.
Getting Americans to choose a local institution could be as simple as offering innovative banking products and doing more community outreach. If institutions promote features consumers want, they could expand their customer or member base.
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Most Americans value advertisements and marketing that address their needs. 83% would take action if they saw advertisements for a banking product or service that interested them. This includes:
- 91% of Millennials
- 91% of Gen Z
- 80% of Gen X
- 77% of Boomers
To meet consumer needs and better compete with megabanks for deposits, community banks and credit unions must:
- Provide products and services that deliver compelling consumer value.
- Make sure consumers are aware of these valuable solutions through cross-channel marketing practices.
These two initiatives will help local financial institutions supercharge deposit growth and compete against the megas.
Click Here to visit our contact page or contact your Allied Solutions sales representative to learn about our deposit and loan growth solutions.
The concepts and statistics in this blog post were pulled from a December 2018 consumer study conducted by The Harris Poll on behalf of Kasasa, Kasasa Explores: What do Consumers Really Think About Financial Institutions.
About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of 4,000 clients along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains over 15 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc. Allied Solutions has tools and resources that can help you keep an eye on the potential areas of impact, protect against collateral losses, and stay on top of any new events, bulletins, and regulations as they happen.
Kasasa® is an award-winning financial technology and marketing provider. Based in Austin, Texas, Kasasa helps more than 800 community financial institutions establish long lasting relationships with consumers residing in their local markets through its branded retail products, world-class marketing capabilities, and expert consulting. The company reinvented checking and is now reinventing lending through its latest offering, Kasasa Loans®. For more information, please visit www.Kasasa.com, follow our blog at Kasasa.com/blog, or share with us on Twitter @Kasasa, Facebook, or LinkedIn.