This year, we forecast that 55.4 million millennials ages 23 to 38 will use digital banking. But, they’re not all fans of digital-only banking.
Fewer than half of millennial respondents ages 18 to 34 said they’d consider moving their accounts to a digital-only institution, according to January 2019 data from Marqeta.
“What’s striking about these figures is that, while lots of millennials use digital banking in various forms, nearly half wouldn’t even consider switching to a digital-only bank," said eMarketer principal analyst Mark Dolliver. "That's likely because, though they may use branches less than older consumers, they don't want to forgo the option of going to a physical location. And why should they? The step from ‘digital’ to ‘digital-only’ is a big one, and many millennials will be in no hurry to take it.”
That makes sense because, online and in person, millennials bank more than any other generation per month, according to Q4 2018 research from the Bank Administration Institute (BAI).
So, if it's not only digital, what is this cohort looking for when it comes to their finances?
Convenience and quality.
According to Marqeta, 27% of US millennials feel that digital apps are the most important service their bank provides. But, survey data released in Q1 2018 from Javelin Strategy & Research and Jumio found that 43% of millennials had abandoned mobile banking activities because the process took too long or was too complicated.
What’s more, according to Mark Riddle, director of research and content delivery at BAI, half of all millennials would switch to another bank or credit union if it offered a digital app that was superior to the one they were using.
Millennial demand for tech-savvy services will only grow. We expect 57.5 million US millennials to be digital banking users by the end of our 2022 forecast period, accounting for more than three-quarters of the millennial population.
Many institutions already have plans in order to keep up with customer growth and demand; 37% of banks said expanding their digital presence was a top priority, according to a January 2019 report from Cornerstone Advisors. This is up from 18% in 2018. The report also found that 49% of bank executives said fintech partnerships will be important in 2019.