Transparent and social: the new banks of the Millennials

Among the many sectors that millennials are changing, that of banks could not be missing, especially large institutions. A recent study by the banking consulting firm Cronerstone Advisors, conducted between October 2020 and July 2021, has noticed this, which sought to identify the institutions preferred by consumers to deposit their savings. The percentage of millennials (i.e. the age group between 26 and 40) who have their main account with Bank of America fell in the period under investigation, about ten months, from 22% to 13%. But also Generation X (between 41 and 55 years old) has decreased its presence with the US banking giant, dropping from 18 to 10%. The overall decline for Bank of America was 32%, from 38.6 million to 26.3 million “primary” account holders. A consistent decline, shared by other large institutions. Wells Fargo has “lost” 870 thousand customers especially in Generation Z (born between 1995 and 2010). The same happened to the Community banks (the equivalent of the cooperative credit funds), which lost 1.66 million account holders, and the Credit Unione (600 thousand fewer customers). All between millennials and GenZs, but these relatively young consumers have certainly not moved on to keeping their money under the mattress. If on the one hand they maintain – even if not as a main current account – a presence in large institutions, their point of arrival is digital banks. One in four in that age group has their main account in a digital bank, a percentage doubling from nine months ago. And even the oldest Generation X is climbing aboard the new trend. The percentage that moved from a large traditional institution to a digital bank rose from 8% to 14% over the same period. Among the most popular services are PayPal, Current, Dave and Square Cash, although some of these cannot be defined in all respects as current accounts, especially given the commitment that Bank of America had put into the development of its online platform. banking and digital services offered, and makes rethink the priorities of these age groups who are interested not so much in the amount of options available, but in product design and innovation. These fintechs allow a much higher customization and redesign the very concept of current account, but their strengths are not only here: behind there is often a targeting of well-defined audiences, in niches of age or interest. And therefore, even if they are not banks, they end up being preferred and indicated by increasingly large groups of people as such.For example, environmentally conscious consumers have found the ideal bank in Aspiration: it measures the sustainability of businesses with a specific index, a score also to customers based on their purchases. And it allows, with small rounding, to alleviate its environmental impact and finance initiatives for forest conservation. Then there are fintechs that support racial causes, such as First Boulevard which offers cashback for those who buy from African American management businesses. Daylight, particularly attentive to the LGBT community, offers the possibility to apply for credit cards with the chosen name (and not the one assigned at birth) and has thus become extremely popular with transsexuals, as well as offering ad hoc financial advice. these consumers are not abandoning large institutions en masse, rather they are using them as a “parking lot” for their savings while waiting to move them to better places, which are often not giants but small fintech realities closer to needs, to causes, and the priorities of new savers. And mobile banking tools will certainly not be enough to stop this trend.