Raised in an age of evolving technology, many young consumers are still banking the way their parents historically have done. According to a recent Mintel report, only 33 percent of consumers 18-34 are using online banking services. In addition, 37 percent of those ages 18-34 say that “better customer service” would cause them to switch banking providers.
With numerous financial service options available, Mintel’s research also shows that younger consumers still have concerns about the security of online banking. Some 40 percent of those who do not use online banking state it is because they “don’t trust transactions on the Internet”.
“Financial services companies continue to elevate their level of safety and security messaging to their consumers, but it is interesting that the Echo Boom and Gen X groups do not necessarily have their fears laid to rest,” said Susan Menke, senior financial services analyst for Mintel. “The fact that many of them still rely upon human interaction for their banking is actually surprising, given the fact that these generations have grown up with the Internet already being a staple in American culture.”
In addition, with 80 percent of respondents in the 18-24 years old and 83 percent of 25-34 year olds owning debit cards, credit card ownership has been dropping in recent years for these age groups. However, contactless credit cards provide a new outlet for attracting new consumers, with over 60 percent of consumers in this age range showing interest in the newer option.
“Younger consumers understand that many of their parents have dealt with credit card debt, specifically during the boom of these types of products and services,” said Menke. “Because they have been able to see older consumers dealing with potential debt challenges, it has made some younger consumers more cautious when it comes to using credit cards. Over 70 percent of respondents in the 22-24 age range stated that they do not like the idea of being in debt, and that can significantly impact their relationship with credit card companies.”
Consumers in this group are looking more to the future, with more than a third of respondents in the 18-34 year old range stating that they already have a retirement savings account of some kind. Approximately a third of these consumers also have high expectations from the financial services industry, as they continue to look for quality personal service, either with or without competitive fees and interest rates or other bank offerings.
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