Alkami Report Investigates Generational Divide in Banking—Bad Digital Experiences Send Consumers Packing
By W.B. King
Eighty-five percent of consumers contend that digital experience quality is “essential or important” when choosing a new primary provider—with roughly one in two saying that they would switch providers for a better digital experience. These are among findings from the fourth annual Generational Trends in Digital Banking study, which was conducted by Alkami in partnership with The Center for Generational Kinetics.
The Plano, Texas-based Alkami provides a digital sales and service platform for U.S. banks and credit unions, while the Austin, Texas-based Center for Generational Kinetics bills itself as the nation’s leading Gen Z, millennials, and generations research, speaking, and advisory company.
Entitled Tailoring the Banking Experience to Each Generation, the study surveyed 1,500 U.S. participants ages 22-65 who currently have a bank account and are active in digital banking. “The findings are clear: digital banking has become where financial institutions keep or lose account holders,” the report stated.
Anticipatory Banking
The report noted that consumers are at a crossroads of sorts—digital banking and AI are reshaping expectations more than ever before. This is what Alkami called, “Anticipatory Banking.” Financial institutions able to combine an understanding of generational needs with accountholder-level data, the report contends, will be best positioned to anticipate, onboard, engage, and grow relationships.
“Preferences are oftentimes reduced to stereotypes where younger generations only want mobile, or older generations only want to visit a branch for on-site service,” said Marla Pieton, Vice President, Brand, Public Relations and Influencer Marketing at Alkami. “This year’s research tells a more insightful story where generational differences reflect a variety of life stages, financial complexity, and comfort with technology.
Financial institutions that understand those differences can design more relevant digital experiences, guidance, and offers across the entire lifecycle of the banking journey.”
The report also found that 43% of digital banking Americans currently use their financial provider because it was recommended by a friend or family member. “Referrals may open the door, but account opening determines whether the relationship earns momentum.”
Additionally, 73% of Gen Z prefers using their mobile device when opening a checking or savings account and 33% plan to grow the number of companies they have a financial relationship within the next year, which was the highest of any generation polled. Seventy-seven percent of millennials prefer using their mobile device when opening a checking or savings account online, while 86% said digital quality is important when choosing a new primary provider.
“Gen Z is mobile-first and more willing than any other generation to expand their financial relationships. Make onboarding fast, clear, and easy to complete from a mobile device so a first interaction becomes a reason to stay, not to keep shopping,” the report continued. “Millennials are in a life stage where financial needs keep appearing. Reduce friction early and connect onboarding to the next useful action, whether that is funding, saving, credit, or household money management.”
Forty-four percent of Gen X would open a new account with their primary provider if it took five minutes-or-less and 63% prefer using their mobile device when opening a checking or savings account online. Fifty-one percent of baby boomers would open a new account with their primary provider if it took five minutes-or-less (significantly more likely than younger generations) and 58% prefer using their computer when opening a checking or savings account online.
“Gen X values speed, but they also need an experience that feels dependable. Make account origination efficient, well-documented, and easy to resume, with support paths available when the decision requires more information,” the report continued. “For baby boomers, tenure and familiarity matter. Opening a new account should build on that trust. Design the experience to feel secure and familiar, with visible confirmation and simple access to help.”
No Longer a Promise of Exclusivity
There remain significant challenges for regional and community institutions, most importantly remaining relevant. Only 38% of consumers at regional and community financial institutions said product recommendations have become more relevant over the past year, compared with 51% at online-only providers and 50% at major national institutions, the report found. Additionally, 44% of digital banking Americans wish their primary provider did a better job anticipating their financial needs and goals.
When it comes to AI in banking, consumers are open to it but only when it makes sense, the report found. For example, “51% of digital banking Americans are comfortable with AI processing their financial data if it leads to a better experience. Security and fraud protection, saving time, and supporting better financial decisions emerge as compelling use cases.”
Jason Dorsey, President of The Center for Generational Kinetics and a leading generational researcher, said: “Consumers are not looking for a one-size-fits-all banking experience. A primary banking relationship is no longer a promise of exclusivity. Consumers may stay with the same bank or credit union for years while spreading their financial activity across providers that better meet specific needs.”
He continued. “Financial institutions that use these generational patterns as a starting point, then pair them with account holder data can become more relevant in the moments that shape financial behaviors and stay relevant.”
