In today’s competitive financial landscape, understanding generational preferences is crucial for community banks and credit unions aiming to grow their market share and effectively compete with big banks. Insights from a recent BAI report reveal how different generations value distinct features from their primary financial institution (PFI). To attract and retain new account holders, it’s vital not only to recognize these preferences but also to implement the right digital tools to meet and surpass their expectations.

Tailoring Strategies for Every Generation

Different generations have unique priorities when choosing a PFI. Here’s a breakdown of what each group seeks:

• Baby boomers: Value convenience, reputation and comprehensive financial services. They look for high‑yield money market accounts, wealth management options and reliable peer-to-peer (P2P) payment solutions.
• Gen X: Prioritize convenience, solid reputation and competitive rates, similar to Boomers, with an added emphasis on practical financial management tools.
• Millennials: Seek cash incentives, budgeting tools and financial education. Millennials prefer institutions offering these resources, while 81% are willing to switch for a better digital experience. They also prioritize no‑fee banking.
• Gen Z: Seek seamless digital experiences and mobile-centric services. Although they heavily rely on technology, they still value the reassurance of physical branches for added security.

Meeting the Digital Demands

To stay competitive with big banks, you must offer the right blend of digital capabilities and consumer-focused services. And while baby boomers and Gen X value branch and ATM convenience, Gen Z’s expectations are rooted in a seamless digital experience. Despite their reliance on digital platforms, Gen Z still finds physical branches important for peace of mind.

This means having robust technology that integrates smoothly with what consumers want when it comes to banking. Ensuring you have the digital tools and platforms to offer a compelling user experience is essential. It could involve upgrading existing systems or finding new vendors that align with your goals.

Essential Offerings for Growth

Baby boomers and Gen X are significant demographics with substantial wealth, so focusing on high-value services and competitive rates is crucial. However, millennials and Gen Z are attracted to features like cash incentives and advanced digital tools. Understanding these preferences is not enough — it takes having the technology to deliver them effectively.

For instance, millennials are more likely to switch PFIs for a better mobile app, highlighting the importance of investing in top-notch digital solutions. Gen X values competitive rates but also seeks out financial institutions with strong reputations and convenient service options.

Overcoming Tech Challenges with Strategic Support

Integrating and upgrading technology can be complex, often presenting challenges for community banks and credit unions that may be understaffed. This is where strategic partnerships become invaluable. Collaborating with experts who specialize in working closely with the industry’s technology vendors can help seamlessly enhance your digital capabilities without being overwhelmed by the process.

Such partnerships can offer the expertise needed to implement and manage advanced systems, ensuring your FI can offer the digital features that consumers demand. The added support will save you time and energy and help develop an effective action plan. This approach not only helps keep up with industry standards and an evolving marketplace, but also keeps you ahead of competitors.

Preparing for the Future

As millennials and Gen Z are poised to inherit significant wealth by 2030, there’s a unique opportunity to attract and retain these younger audiences. However, focusing solely on these younger generations without neglecting existing account holders can be a delicate balance. Baby boomers and Gen X should also be considered in strategic planning to avoid alienating any demographic.

Implementing a comprehensive strategy that addresses the needs of all generations while leveraging the right technology is essential for sustainable growth. By doing so, you’ll not only meet current consumer expectations but also be well-positioned to adapt to future demands.

To thrive in a competitive environment and grow market share, it takes aligning your offerings with generational preferences and investing in the necessary digital tools. By understanding what each generation values and partnering with the right technology vendors, you can enhance the user experience and stay competitive with national banks. This balanced approach will help attract new account holders while retaining your existing base, ultimately driving long-term success. 

Need help evaluating your legacy systems to position your financial institution for the future? Click to learn more about a complimentary assessment today.