Nearly 40% of Canadian and US adults under 35 would switch to an online-only bank; 30-40% would bank with a technology company
TORONTO, May 27, 2014 /CNW/ - Younger bank customers are nearly twice as likely as older customers to consider switching to a branchless bank and to consider banking with major technology players if those companies offered banking services, according to findings of a survey of nearly 4,000 retail bank customers in the United States and Canada appearing in two new reports by Accenture (NYSE: ACN).
The 2014 North America Consumer Digital Banking Survey found that 39 percent of customers 18 to 34 years old would consider switching to a branchless bank, compared with 29 percent of customers 35 to 55 and 16 percent of customers over 55. In Canada, more than a quarter (27 percent) of all bank customers would consider a branchless digital bank if they were to switch financial institutions.
The survey also found that significant percentages of consumers — particularly younger ones — would be open to banking with technology players such as Google, Amazon and Apple if the companies offered such services. Among consumers ages 18 to 34, 40 percent said they would consider banking with Google, 37 percent would consider banking with Amazon, and 34 percent would consider banking with Apple. Those percentages were 23 percent, 23 percent and 20 percent, respectively, for respondents age 35 to 54 and dropped to 5 percent, 7 percent and 6 percent, respectively, for respondents over 55.
"The game is changing for banking in Canada and the US, and tomorrow's consumer is coming of age with a very different perception of what a bank could be," said Jodie Wallis, managing director of Accenture's Canadian banking practice. "These new customer expectations will prove disruptive to banks, if non-bank entrants gain momentum and if banks do not adapt quickly."
According to the survey, overall 72 percent of consumers age 18 to 34 would be "likely" or "very likely" to bank with at least one technology, telecommunications, retail, or shipping/postal company that they do business with if they offered banking services. More than half (55 percent) of consumers age 35 to 54, and 27 percent of those ages 55 and older said the same. In Canada, 60 percent of bank customers age 18 to 34 and nearly half (47 percent) of those age 35 to 54 would bank with a major technology, telecommunications or shipping/postal player, such as Rogers Wireless, Bell Mobility, TELUS Mobility and Canada Post.
Emerging Demand for Money Management, Purchasing Advice
According to the survey, younger consumers were also more likely than older consumers to want their banks to offer more services and solutions to help them with financial management and purchases. Specifically:
- More than half of respondents age 18 to 34 (55 percent) said they would like their bank to help with the "heavy lifting" of car-buying and provide discounts in that process, compared with 45 percent of those age 35 to 55, and one-quarter (24 percent) of those over 55.
- More than half of the younger respondents (57 percent), compared with 47 percent of those age 35 to 55, and one-quarter (24 percent) of those over 55, said they would welcome more help from their bank in the process of purchasing a home.
- More than two-thirds of younger respondents (68 percent) expressed interest in receiving real-time analysis of their spending from their bank, including "safe-to-spend" forecasts, compared with 56 percent of those age 35 to 55, and 34 percent of those over 55. Among the younger group, two-thirds (67 percent) said such services would make them more loyal to their bank compared with 67 percent of those age 35 to 55 and 38 percent of those over 55.
"Banking is widely viewed as a purely transactional activity, but people are seeking advice and relationships that improve their financial well-being," said Robert Mulhall, a managing director in Accenture Distribution and Marketing Services. "In this digital era, the most successful companies focus on solutions, rather than products, to simplify their customers' everyday lives. Banks also need to think this way."
Juan Pedro Moreno, senior managing director of Accenture's global Banking practice, said, "Digital technologies are dissolving the boundaries between industry sectors. For banks, simply being 'more digital' versions of what they are today will not be enough to assure success in the future. They will need to move beyond their traditional role as enablers of financial transactions and providers of financial products to play a deeper role in the lives of their customers - by applying digital technology in new ways and by offering tangible value and advice based on transaction information."
"The Digital Disruption in Banking; Demons, Demands, and Dividends," a North America banking report, and "The Everyday Bank; A New Vision for the Digital Age," Accenture's global digital banking point of view, are available for download on Accenture's website.
Accenture conducted an online survey of 3,846 bank customers in North America between March 10 and March 18, 2014. Approximately 70 percent of the respondents (2,677) were in the United States and 30 percent (1,169) were in Canada. The survey has a statistical margin of error of 1.5 percent.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 289,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.
Image with caption: "According to Accenture's 2014 North America Consumer Digital Banking Survey, Canadians categorize their relationship with their bank as transactional (CNW Group/Accenture)". Image available at: http://photos.newswire.ca/images/download/20140527_C7011_PHOTO_EN_40783.jpg
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