Only 33% of consumers ages 18-34 are using online banking services, according to data compiled and recently released by market researcher Mintel of Chicago. In addition, 37% of those in that same age range say better customer service would spur them to switch banks. Security is also an issue. Some 40% of those surveyed says they don't use online banking because "they don't trust transactions on the Internet."
"Financial services companies continue to elevate their level of safety and security messaging to their consumers, but it is interesting that the Echo Boom and Gen X groups do not necessarily have their fears laid to rest," says Susan Menke, senior financial services analyst for Mintel. "The fact that many of them still rely upon human interaction for their banking is actually surprising, given the fact that these generations have grown up with the Internet already being a staple in American culture."
Here's another surprise. In a day where deficit spending has practically become a norm, credit card ownership has dropped in recent years among younger customers: 80% of respondents 18 to 24 years old and 83% of respondents ages 25 to 34 own a debit card.
More than 60% of consumers are interested in the new contactless credit cards which allow for speedier checkouts.
"Younger consumers understand that many of their parents have dealt with credit card debt, specifically during the boom of these types of products and services," says Menke. "Because they have been able to see older consumers dealing with potential debt challenges, it has made some younger consumers more cautious when it comes to using credit cards. Over 70 percent of respondents in the 22-to-24 age range stated that they do not like the idea of being in debt, and that can significantly impact their relationship with credit card companies."
Consumers in this group are looking more to the future, with more than a third of respondents in the 18- to-34-year-old range stating that they already have a retirement savings account of some kind. Approximately a third of these consumers also have high expectations from the financial services industry, as they continue to look for quality personal service, either with or without competitive fees and interest rates, or other bank offerings.