If you’ve been looking for some good statistics on the connection between millennials, their dislike of banking fees, and their inclination to switch financial institutions, look no further.
A recent article titled “FICO Survey: Millennials 2 To 3 Times More Likely To Switch Banks” revealed the results of FICO’s latest consumer research. The article reported that millennials (the 25-34 age group) “are 2 to 3 times more likely to close all accounts with their primary financial institution than people in other age groups.” Millennials are also twice as likely to close all accounts and switch banks this year than they were last year.
This potential for closing accounts and switching institutions “could drive a high amount of customer churn,” the article reports, as this group holds 6.27 financial products on average, compared to 5.79 for the entire U.S. adult population.
So what are some of the reasons so many millennials are inclined to switch?
- According to the survey, 45 percent of millennials ages 25-34 cited high fees as a key reason for leaving their banks. For younger millennials ages 18-24, the number was also high at 36 percent.
- The second biggest reason 25-34 year-olds switch banks is having had a negative experience when they missed a payment.
- In a tie for the third biggest reason for switching were inconvenient branch locations and too few ATMs.
FICO Senior Director Joshua Scholl is quoted throughout the article and says that “banks will need to address millennials’ sensitivities to bank fees and a desire for convenience in order to arrest churn and build loyalty.”
Fortunately, being part of Alliance Once means your credit union is already providing something millennials want: offering thousands of convenient ATMs with lower ATM fees to your members. You’re also benefitting your credit union and your members in the following ways:
- You’re competing with larger financial institutions by multiplying your members’ access to ATMs, without having to pay foreign ATM surcharges.
- You’re generating more ATM traffic to your credit union’s ATMs and earning interchange income from participant transactions.
- You’re cooperating with credit unions and financial institutions across the country.
- You’re helping the underserved keep more of their money in their pockets.
Now is a great time to capitalize on millennials’ sensitivities to bank fees and entice them to join your credit union so they can take advantage of your convenient ATM services and low ATM fees. Financial institutions that can provide digital convenience combined with low fees stand to reap significant rewards.