PALO ALTO, Calif. — [Press Release] — The Medallia Institute finds that overall customer experience has the single greatest influence on how consumers decide where to bank. Of 2,000 U.S. Millennials and Baby Boomers surveyed, 63% of Millennials and 54% of Boomers cite personal experience, reviews or recommendations as being the most influential when choosing where to open a checking account. Beyond choosing a bank, 80% of Millennials also cite these factors as the top reason for switching banks.
"As the largest generation in the U.S., Millennials represent massive current and future purchasing power,” said Beth Benjamin, senior director of the Medallia Institute. “Capturing and maintaining their attention is paramount to earning their brand loyalty.”
Once considered critical, branch location is no longer the key factor for consumers when selecting their retail bank. Only 13% of Millennials cited convenience as most critical in their selection process. Convenience is only slightly more important to Boomers, with 20% citing convenience as most influential in their bank choice.
“Experience factors—personal interactions with the brand, online reviews, and recommendations from friends and family—have replaced branch proximity as the most important driver of customer acquisition,” said Robert Schiff, vice president and general manager of financial services at Medallia. “Market leaders must become experience leaders if they want to stay on top. Welcome to New Finance.”
What makes for a positive customer experience? Both Millennials (93%) and Baby Boomers (91%) say it starts with getting the basics right, including security of personal information, transaction efficiency and effective problem solving. Millennials, in particular, respond positively to innovation with nearly 65% reporting that their day-to-day behavior is driven by a desire to find new and better way of doing things.
“What it means to deliver great experience is changing. Historically, it was about pain-free processes and pleasant service,” added Schiff. “Now Millennials are demanding a level of novelty and experimentation that looks more like what we expect from a fashion house than a bank. There’s real work to do if we’re going to keep up.”
Additional Research Findings
* Online banking is the most frequented channel: 81% of Millennials and 72% of Boomers have interacted
with their bank online in the past 30 days (logged into an online account and/or used a mobile banking application). Millennials are 2.6 times more likely to have used a mobile app.
* The preponderance of online banking does create significant challenge for financial institutions:
55% of Millennials rank technology failures or the inability to carry out a transaction online in their top three most frustrating banking experiences.
* The human factor has a stronger impact on how Boomers rate customer experience than on how Millennials do. Boomers are 2.4 times more likely than Millennials to cite an interaction with a bank employee as driving a positive experience, and 1.7 times more likely to list bank employees as a top source of frustration.
The Medallia Institute conducted a panel survey of 2,000 Millennials (ages 21-32) and Baby Boomers (ages 51-69) in the U.S. The sample was matched to census on race, income, region, and gender to ensure a representative model of consumers.