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Banking & Finance

Apiture Measures Generational Tastes In Banking

By Cece Nunn, posted Jul 5, 2024
For financial technologies companies like Wilmington-based Apiture, measuring what banking trends currently appeal to different generations is useful.

Founded in 2017, Apiture caters to community and regional banks and credit unions and has more than 300 clients who use its digital banking tools, CEO Chris Babcock said. Headquartered in a building on Live Oak Bank’s campus in midtown Wilmington, the firm employs about 120 here and 325 total.

Because economists report an $80 trillion wealth transfer between older and younger generations on the horizon, Apiture officials recently commissioned a Harris Poll to find out how different generations view their banks and digital banking.

It’s well-known that many baby boomers (those born between 1946 and 1964) and Gen Xers (1965-1980) grew up using bank branches. Younger generations tend to focus first on digital banking.

That’s good news for fintech firms like Apiture.

“What that poll showed us is that while 80% of the accounts in the country come from the top four or five institutions, a lot of those Gen Z and millennials are willing to switch to a community bank or credit union if you give them a better online experience,” Babcock said.

The Harris Poll, a market research and analytics company, surveyed about 2,000 consumers ages 18 and older on behalf of Apiture in February. According to the poll documentation, the sample was weighted to be nationally representative of age, gender, education, race, region, income, household size, political party affiliation and marital status, and the sample data is accurate to within +/- 2.8 percentage points.

About half of Gen Z bank customers and millennials surveyed reported a willingness to switch to a community bank, online-only bank or credit union. Meanwhile, 49% of Gen Xers and baby boomers responding to the polls indicated a willingness to switch to a local bank. Only 25% of the older generations might want to change to an online-only bank.

“A majority of the youngest American consumers – including 80% of Gen Z and 81% of millennials – report that digital banking is at the core of their banking preferences,” according to The Harris Poll-Apiture report. “And modern digital banking technology is the most frequently cited factor they consider when choosing a financial institution, with 53% of Gen Z and 51% of millennials identifying it as a top need.”

Of course, the poll’s results help Apiture market its digital offerings. But they also confirm generational differences that anecdotal evidence suggests.

Many banks seem cognizant of technology needs and desires among different generations.

“Younger consumers expect online and mobile banking solutions to be available around the clock,” according to the report. “Currently, 51% of Gen Z and 58% of millennials are satisfied with the digital banking availability of their financial institution.”

Younger generations, particularly Gen Z and millennials, also use some digital features much more frequently, according to the report. Those features include using peer-to-peer payment services such as Zelle; transferring funds between accounts; budgeting and expense tracking; and monitoring credit scores.

The report also provides insight into a hot topic across all industries: artificial intelligence. According to Apiture’s Harris Poll, 43% of Americans could envision using some kind of AI-powered financial assistant over the next five years. The poll also showed that 39% of them can see using augmented reality/virtual reality for financial education in the next five years or sooner.

“We do a lot with data and helping people understand their financial data,” Babcock said. “We view that as an interesting opportunity for us to help better serve these clients, help with financial education and help with how they’ll be able to better support their financial lives.”

In addition, the poll showed that 36% of Americans could see using AR/VR for interactive banking services in the near future.

Another portion of the study pointed out that some younger generations don’t know they have the option of using a credit union, according to the poll.

“A sizable portion of consumers – including 30% of Gen Z and 21% of millennials – do not have credit union accounts because they simply aren’t aware that membership is an option for them. Credit unions must focus on building awareness with this segment,” Apiture’s report states.

The poll provided many more points in favor of technology.

“I think what the poll does is just support the importance of having a really good digital brand,” Babcock said. “For a community institution, you want to keep that level of care and level of focus on the individual and on the business that made them special as an institution, just extend that out digitally to provide the services that they need, whether it’s over the mobile phone or on the computer.”
 
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