Banks’ Boomer Bust
Nearly nine in 10 baby boomers (89%) currently have at least one checking, savings, or money market account at a bank or another financial institution. But Gallup’s 2013 retail banking study shows that just 12% of baby boomers with active bank accounts trust banks a “great deal,” with the majority placing only “some” or “very little” trust in these institutions.
Notably, nearly as many boomers (11%) have very little trust in banks, compared to the 12% that have a great deal of trust. By contrast, 25% of “millennials” (those born between 1980 and 1996, according to Gallup) have a great deal of trust, while 18% of Generation X (1965-1979) do. I don’t know about you, but these results are roughly opposite of what I would have expected. Younger consumers (forgive me while I over-generalize) tend to be more liberal and therefore might be expected to be more distrustful of big business generally. And they’re certainly more tech-savvy than older consumers, and are thus likely more discriminating in their appraisal of, say, banks’ online and mobile offerings. And yet compared to the older baby boomers, youngsters are positively slavish in their devotion to banks. Fully 59% of millennials have either a great deal or quite a lot of trust in banks versus just 46% of boomers. This says a lot about the state of retail banking these days,and not much of it’s good. The baby boom cohort is bigger than both Gen X and the millennials, and considerably more affluent. Its financial needs are broader and are more complex. Given this, I’ll grant you that boomers aren’t easy to please. But one would think that Job 1 in executive suites at banks around the country would be devising strategies to woo baby-boom types and keep them happy. And yet on that score, the banking industry seems to be failing miserably. The banking industry has plenty of problems these days: new, costly regulation, for instance, a distribution system that’s in flux, and reams of bad publicity. The least the industry might manage to do, it would seem, is figure a way to keep one of its key customer segments happy. But no. What do you think? Let me know !
11 Responses to “Banks’ Boomer Bust”
I hate to over generalize also but couldn’t this be just a case of bank services being a better deal for boomers than millenials? Young people tend to have lower balances and a bank account gives them more credibility than a debit card, etc. I think new customers tend to be more grateful. And boomers read more newspapers than millenials. Given that 98% of what’s written about banks is negative, that can’t be good.
Correction – I meant a better deal for milenials than boomers.
How can anyone trust banks to manage their money when, based on the results from the Financial Crisis, so many of them could not manage theirs?
When the survey question asks about “banks”, of course we have a black eye. Did the questioners follow-up
with: “how much do you trust YOUR bank?”, I would expect a much better rating!
I’m a banker (25+ years) and a boomer. Though banks, especially the big ones, want to be a financial supermarket none has done so successfully. Sure they’re pretty decent at being one trick ponies with one product or another. And, depending on where you live, they may be really convenient. But, the type of loyalty that results in customers only ever going to one bank is absent when it comes to the national and regional banks. Community banks can pull that one off because of the personalization of their services, but that’s where it ends.
Banks are a cut above the Federal Government and the regulated utilites for customer service for this boomer. That may look bad but I am aware of only one organization that deals well with enormous numbers of customers asking for very little beyond the basic infrastructure that is in place. That organization is Amazon and their closest counterpart in financial services is Capital One 360, IMHO.
Benso, how can i place trust in any institution that wants to max its gains by maxing what it can get from me? That goes for banks as well as gvt. I’m not really sure which gives me the better bang for the buck it takes from me.
As a boomer, my opinion is a bank is a necessary evil to have a checking account – and those days are numbered. The big banks seem to think they can sell uncompetitive products just because they have a “relationship” with their traditional products customers. The purposes of additional financial products seem more to be for the banks benefit as more profitable products rather than designed to actually cost effectively help boomers manage their own finances.
You are correct. We want safety first A little return and simplicity in Banks. Things seem to be becoming more and more complex and more risky. Of course there is no return. I would also like to have a place to store valuables which is secured from natural disaster, the government and any other threat but fairly readily available to me.
Tom, you and I discussed this over 10 years ago! It’s amazing that the banks still don’t know where the money is, or how to develop long term loyalty. Women-Boomers especially remain the top prospects for banks that continue to ignore them. Boomers can also provide significant circle-of-influence new business for banks. As a financial services marketer, my message to banks seems to continue to fall upon deaf ears.
+1 to Jim M’s comment. It’s a little like congress: “he may be a SOB but he’s MY SOB!”
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