Survey Finds Banks May Be Unprepared to Serve Millennials

BRENTWOOD, TENN., August 31, 2015 — The traditional banking industry may find itself unable to attract a decidedly untraditional digital generation: Sixty percent of the executives and board members responding to Bank Director’s 2015 Growth Strategy Survey say their bank might not have the right products, services and delivery methods to serve millennials, many of whom are already in their early 30s. In addition to the generation gap between bank boards and executives, many of them baby boomers, and younger adult consumers, a technology gap exists: Seventy percent of bank directors don’t use their bank’s mobile channel. Even fewer use newer services, such as Apple Pay.

The U.S. Census Bureau announced earlier this year that millennials surpassed baby boomers as the largest segment of the population.  

The 2015 Growth Strategy Survey, sponsored by technology firm CDW, reveals how bankers perceive the opportunities and challenges in today’s marketplace, and technology’s role in strategic growth. The survey was completed by 168 chief executive officers, independent directors and senior executives of U.S. banks with more than $250 million in assets in May, June and July of this year. 

Key findings include:

• Apple is the nonbank competitor respondents worry about most, at 40 percent. Just 18 percent of respondents indicate their bank offers Apple Pay.
• Bank mobile apps may not keep pace with nonbank competitors. Features such as peer-to-peer payments, indicated by 28 percent of respondents, or merchant discounts and deals, 9 percent, are less commonly offered within a traditional bank’s mobile channel. Forty-nine percent of respondents indicate their bank offers personal financial management tools.
• Loan growth is the primary driver of profitability for the majority of responding banks. Eighty-five percent of respondents see opportunities to grow through commercial real estate loans. Executives and board members also expect to grow through commercial & industrial (C&I) lending, for 56 percent, and residential mortgages, at 45 percent. 
• Despite the rise of P2P lenders like Lending Club and Prosper in the consumer lending space, just 35 percent of respondents express concern that these startup companies will syphon loans from traditional banks. 
• Boards are focusing more on technology. Forty-five percent of respondents indicate their board discusses technology at every meeting, and almost half say their board has at least one member with a background or expertise in technology.  
• Seventy-five percent of respondents want to understand how technology can make their bank more efficient. Seventy-two percent want to know how technology can improve the customer experience. 

Full survey results are available online at BankDirector.com, and will be featured in the 4th quarter 2015 issue of Bank Director magazine. 

ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its quarterly Bank Director magazine, executive-level research, annual conferences, and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America’s banking industry. Bank Director is headquartered in Brentwood, Tennessee.

ABOUT CDW
CDW is a leading provider of technology solutions and services dedicated to supporting the highest standards of trust and performance for the financial services industry. For 30 years, CDW has continued to help over 15,000 banks, credit unions, capital markets and specialty financial services companies assess and align their IT infrastructure with growth strategies, managing regulatory compliance and costs.

Source: BankDirector.com

Contact: Emily McCormick, director of research, (615) 777-8471, [email protected]