New research from uSwitch has found that quarter of millennials (18-34 year olds) think tech companies, like Google and Amazon, could offer better financial services for their generation, and a further 18% would place supermarkets above banks.
However, one third still believe their bank offers products to help them deal with their financial challenges.
Where are banks going wrong?
Many millennials have never used key products offered by their banks. A fifth have never deposited a cheque and 62% are not taking advantage of the mortgage services on offer. Instead young people would prefer services such as:
- help with how to improve their credit history
- clear information on savings and pension products
- general advice on how to better manage their money
There was also demand for better, more tech-savvy apps. For example more than two thirds of 18-34 year olds said they would like to be alerted via their banking apps for higher than expected bill payments, or automatic blocks if card transactions take place in a different location to their phone.
Are branches a thing of the past?
In the last three months, almost two thirds (59%) of young people haven’t set foot in a high-street branch, but 77% logged into their online banking. A fifth prefer to use their mobile banking app to keep an eye on their finances.
Reflecting this generation’s shift from high-street to online services, 17% rated online services as more important than customer service, and 8% chose their bank because of its mobile offering.
So, it’s hardly surprising that young people are more annoyed by poor mobile services offered by their bank (14%), than by not having a local branch (11%).
Young missing out by not switching banks
Young Brits say banks are out of touch with their generation, yet over a quarter (26%) have never switched from the childhood bank account set up for them by their parents. Nicolas Frankcom, money expert at uSwitch.com says:
“This research exposes a contradiction: young people clearly don’t feel that banks meet their needs, yet many remain tied to the bank they joined as a child. But thanks to seven-day switching, it’s quicker and easier for millennials to find a bank that offers what they’re after.
“Millennials have unique needs, and so far, most banks seem to be missing the mark when it comes to catering for these. The banks must work harder, with more innovation around relevant products and services if they are to attract the custom of this generation.
“If they don’t, someone else will – our research already shows that tech giants like Google, Apple and Amazon are emerging as credible alternatives for younger consumers.”