Innovation Makes People Switch Banks

What causes someone to change banks?

According to PYMNTS research, consumers who are most likely to switch their primary financial institution (FI) typically cite several areas of innovation. Thirty-five percent of these “potential switchers” cite offerings of loyalty and reward programs, 32% mention account fraud protection and 32% select data security.

The consumers who value these factors the most tend to be older, with 38% of baby boomers and seniors citing loyalty and rewards programs as a factor they consider. This area was also mentioned by 35% of Generation X, 33% of bridge millennials, 34% of millennials and 26% of Generation Z, showing that almost every age group considered this area important.

Forty-six percent of baby boomers and seniors said they considered account fraud protection an important area of innovation, while the younger age group gave comparable weight to other emerging areas of banking innovation when considering their primary FI.

Among those factors: mobile banking, something named by 29% of the potential switchers; mobile payments, mentioned by 31%; and digital bill payments, selected by 22%.

Twenty-nine percent of bridge millennials said an FI’s mobile banking capabilities are a factor when considering the quality of their primary FI’s innovations, as did 27% of millennials, a quarter of Gen X consumers and 24% of Gen Z banking customers. Only 13% of baby boomers and seniors said mobile banking is of interest to them.

Meanwhile, 41% of Gen Z consumers and 31% of millennials and bridge millennials said mobile payments are of interest when asked to consider their primary FI’s potential innovation.

A similar pattern emerged when it came to other areas of banking innovation, including mobile payments, digital bill payments, real-time payments and mobile card apps.

To learn more about how credit unions are innovating in an attempt to keep their customers happy, download the latest Credit Union Innovation report, a PYMNTS and PSCU collaboration.