When it comes to banking, the youngest customers tend to gravitate toward the biggest companies.
According to the J.D. Power 2015 U.S. Retail Banking Satisfaction Study, released last week, banking consumers of Generation Z — people born in 1995 and later — report an average satisfaction rating of 807 (out of a possible 1,000) with big banks, higher than the demographic’s rating when it comes to regional banks (796) and midsize ones (769).
The report bears out that Gen Z’s preference for larger banks is specifically reflective of the perceived quality of the companies’ facilities and product offerings, as well as the categories of ATM, branch, mobile and website.
Perhaps unsurprisingly, Gen Z customers utilize mobile banking at a higher rate (38 percent) than other generational groups (whose collective average mobile banking rate averages 19 percent). Gen Z also uses mobile more frequently than other groups, at a rate of 48 times per year vs. 39 times per year.
Contrarily, a more unexpected result of the survey relates to branch usage: Gen Z customers reportedly visit their bank branches at a rate (76 percent) not dissimilar to that of the older Gen Y and Gen X groups (72 percent and 74 percent, respectively). Among Gen Z customers who visit a branch, according to the survey, they do so at an average of 12 times per year, while Gen Y and Gen X customers visit branches an average of 11 times and 12 times per year, respectively.
“It is not surprising that Gen Z is satisfied with website and mobile at big banks, but they are also satisfied with the in-person experience at big banks,” said Jim Miller, senior director of banking at J.D. Power. “There is a common misconception that younger customers aren’t using the branch, but they use it about the same as Gen X and Y. Midsize and regional banks risk losing the Gen Z customers to big banks if they can’t meet their needs regarding digital and in-person interactions. There needs to be a seamless experience across all channels. The first step for retail banks is to understand what is important to Gen Z and what drives their satisfaction and loyalty.”
The J.D Power survey — its tenth annual one — polled more than 80,000 consumers regarding various aspects of their banking experience.