Study: Banking Needs, Digital Banking Trends, and Consumer Priorities
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Between the big banks, credit unions, and online-only banks, there are more banking options than ever before. How do consumers decide which bank they'll use?
To find out, we surveyed 2,000 consumers to find out how important different banking features are to them.
Read on to learn exactly what consumers value in a bank.
Key findings
- Digital banking: 91% of consumers view digital banking as an important factor in choosing where to bank. Digital banking importance varies by net worth -- 96% of respondents with a net worth under $1 million view online banking as important, compared to 82% of respondents with a net worth over $1 million.
- Security and service: Security and fraud protection as well as quality customer service were other top priorities for consumers.
- Banking trends: Consumers are placing slightly more emphasis on diversity in bank leadership and savings account interest rates than in previous years.
What customers want from banks: Digital banking and more
Here are the factors that Americans value most when choosing where to bank:
| How important are each of these factors in determining which bank you would open an account with? | 2023 | 2020 | Change |
|---|---|---|---|
| Security and fraud protection features | 92% | 96% | -4% |
| Quality customer service | 92% | 97% | -6% |
| Mobile and online access | 91% | 95% | -4% |
| Low fees on checking and other accounts | 90% | 97% | -6% |
| Easy ATM access | 90% | 92% | -2% |
| Good brand reputation | 89% | 93% | -3% |
| Types of accounts offered | 89% | 91% | -2% |
| Competitive interest rates | 87% | 91% | -4% |
| Convenient branch location | 87% | 88% | -2% |
| Availability of other financial products | 85% | 83% | 2% |
| Diversity in bank leadership | 79% | 75% | 4% |
| Sustainability and environmental friendliness | 76% | 77% | -1% |
| Community involvement | 73% | 73% | 0% |
| Locally owned | 62% | 60% | 2% |
Security and fraud protection features, customer service, and mobile and online access are the most important features for Americans when it comes to picking a bank.
Low fees on checking accounts and other accounts are also important.
Thankfully, a lot of those features go hand-in-hand.
Online banks can offer better fees on checking accounts than brick-and-mortar banks while maintaining banking safety for their customers.
Banking priorities by wealth
Respondents with a net worth of over $1 million viewed both online and physical access to their bank as less important than those with a net worth under $1 million.
Ninety-six percent of respondents with a net worth under $1 million view online banking as important compared to 82% of respondents with a net worth over $1 million.
Millionaires are also less likely to view convenient branch location as important compared to less-wealthy Americans (79% to 90%).
This discrepancy may be due to higher net worth respondents being less likely to have had previous trouble accessing their bank. That’s logical given that those with different net worths are different types of banking customers.
Banking priorities by generation
Banking priorities also differ by generation -- another example of bank customer segmentation.
Generation Z is least likely to place importance on competitive interest rates or access to different financial products and accounts via their bank.
Seventy-six percent of Gen Z respondents think competitive interest rates are important, while roughly 90% of all other generations consider interest rates offered by their bank to be important.
Diversity in leadership is important to significantly more millennials (84%) and Gen Zers (81%) than Gen X (73%) and baby boomers (65%).
Millennials value sustainability and environmental friendliness most (79%), followed by Gen Z (75%). Meanwhile, 71% of baby boomers and Gen X place importance on their bank’s efforts toward sustainability and environmental friendliness.
On the other hand, 91% of baby boomers see convenient branch location as important compared to just 82% of Gen Zers.
Mobile and online access is important for over 86% of all generations -- suggesting older generations have embraced online banking.
Banking trends: Savings rates are most important to consumers
The banks with the best savings accounts still have a big advantage in attracting customers, because savings interest rates are what consumers focus on the most.
| Which interest rates are most important to you? | 2023 | 2020 |
|---|---|---|
| Savings | 53% | 52% |
| Mortgage | 14% | 15% |
| Personal loans | 14% | 15% |
| CDs | 8% | 6% |
| Money market account | 8% | 8% |
| Other loans | 3% | 4% |
The percentage of Americans that prioritize savings account interest rates increased by a percentage point from 2020 to 2023.
Importance placed on mortgage and personal loans rates dropped by a percentage point each.
Slightly more Americans are prioritizing CDs compared to 2020, perhaps reflecting a preference for assets that can provide a return outside of the stock market.
Younger generations prioritize interest rates savings accounts
Millennials and Gen Zers place more importance on savings interest rates than baby boomers and Gen X do.
On the other hand, a larger percentage of baby boomers consider interest rates for CDs, money market accounts, and mortgages than any other generation.
Which interest rates are most important to you?
| Generation | CDs | Money market account | Mortgage | Other loans | Personal loans | Savings |
|---|---|---|---|---|---|---|
| Baby boomers | 10% | 11% | 24% | 2% | 13% | 40% |
| Gen X | 7% | 7% | 17% | 4% | 16% | 49% |
| Millennials | 8% | 6% | 12% | 2% | 13% | 58% |
| Gen Z | 8% | 9% | 13% | 4% | 14% | 53% |
Similarly, those with a net worth over $1 million are more likely to prioritize interest rates for CDs, money market accounts, and mortgages.
Which interest rates are most important to you?
| Net worth | CDs | Money market account | Mortgage | Other loans | Personal loans | Savings |
|---|---|---|---|---|---|---|
| Over $1 million | 15% | 14% | 16% | 5% | 11% | 40% |
| Under $1 million | 5% | 5% | 14% | 3% | 15% | 58% |
These differences in priorities could be a reflection of financial preferences. For example, baby boomers in or nearing retirement may be more likely to look for financial products outside of securities that offer a predictable return like CDs or money market accounts.
Similarly, higher net worth individuals may feel as though their savings do not need to be entirely liquid, so they may opt to put some into less accessible accounts that can offer a better return than a savings account.
79% of consumers are likely to switch banks if they find one that better fits their needs
Seventy-nine percent of respondents said they are likely to switch banks if they find one that better meets their priorities, up from 52% in 2020.
That is a significant change and shows that consumers are increasingly willing to move their money to a bank that better suits their needs -- whether it be by offering better interest rates, lower account fees, or other factors.
Younger generations are more likely to switch banks than older generations. Millennials show the most willingness to switch banks, while baby boomers show the least -- although 61% of the elder generation are still likely to do so.
| How likely are you to switch banks if you find one that better meets your priorities | Likely | |
|---|---|---|
| Baby boomers | 61% | |
| Gen X | 74% | |
| Millennials | 85% | |
| Gen Z | 81% |
Banks need to have it all
To keep consumers happy, banks can't neglect anything. Consumers consider just about every banking feature important. They look for accounts with low fees and competitive interest rates. They want their money to be both secure and easy to access. They expect quality customer service and a good brand reputation.
It's nice to see that social responsibility matters for a majority of consumers when choosing a bank. People want a bank with environmentally friendly practices, diversity in its leadership, and community involvement. These factors may not be at the very top of the list yet, but we expect to see them become more and more important to consumers.
FAQs
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The Ascent’s survey revealed three key consumer trends in banking:
- Digital banking, fraud protection, and customer service are top banking needs.
- Savings rates are the most important type of interest rates for bank customers.
- There is a growing willingness to switch banks if customers feel their banking needs aren’t being met.
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Mobile and online banking was a top priority among 91% of respondents. Importance placed on digital banking was consistent across generations, although high net worth respondents view online banking as less important than respondents with a net worth of under $1 million.
Methodology
The Motley Fool Ascent, distributed a survey via Pollfish on Jan. 26, 2023. Seventy percent of respondents had a net worth below $1 million and 30% of respondents had a net worth of at least $1 million. Respondents were 49% male and 51% female.
The Motley Fool Ascent previously distributed a survey via Pollfish on Dec. 4, 2020. Respondents were 45% male and 55% female.
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