What customers want from banks: online banking trends and consumer priorities (2024)

Between the big banks, credit unions and online banks, there are more banking options than ever before. How do consumers decide which bank to use?

To find out, we surveyed 2,000 consumers to find out how important different banking features are to them.

Read on for the full results of The Motley Fool Ascent's 2024 Digital Banking Trends and Consumer Priorities survey and discover exactly what consumers value in a bank.

Key findings

• Top priorities for the banking industry:91% of respondents see digital banking as an important factor when choosing where to bank, on par with security, fraud protection and quality customer service.
• The most important interest rates:A competitive savings rate means the most for all generations.
• Barriers to switching banks:Three in four respondents would switch banks if they found one that better suited their needs, but the hassle involved and the need to update automatic payments and direct deposits are obstacles.

What do customers want from banks?

Here are the factors Americans value most when choosing where to bank:

Security and fraud protection features, customer service and mobile andonline accessare the most important features for Americans when it comes to choosing a sofa.

Low costscheckkontiand other deposit accounts are also important. Physical checking accounts may incur monthly fees of €10 to €15. There are ways to avoid monthlychecking account fees, including by maintaining a minimum account balance.

Many of the most important functions mentioned by respondents go hand in hand with online banking.

Online banks may offer lower (or zero) checking account fees than brick-and-mortar banks. while maintainingbank securityfor their customers. Online banking customers can also enable account balance notifications that can alert them if they are at risk of going overdrawn and facing a fee. Other online banks have stopped charging overdraft fees altogether.

Online banks offer different types of deposit accounts with low minimum deposit requirements. Direct deposits via online bank accounts are easy to set up. Similar to overdraft fees, some banks are eliminating minimum deposit requirements to fully open accounts.

Bank priorities per generation

Banking priorities vary from generation to generation and reflect the habits, needs and preferences of each age group.

Generation Z is by far the least likely to like their bank's competitive interest rates.

They also place little value on access to ATMs, convenient business location and low account fees compared to other generations. Less than 80% of Generation Z respondents said these factors were important, compared to nearly 90% or more for older generations.

The availability of more financial products is less important for Generation Z (79%) than for other generations.

Generational differences in access to ATMs and branches reflect that Gen Z's banking experience was mobile first, while older generations were transitioning from physical banking to digital banking and may still appreciate some of those physical features. Older generations may still prefer to deposit checks through an ATM instead of an app, or go to a physical bank branch for cash deposits, for example.

Banking trends: The savings interest rate is the most important for consumers

The banks withbest savings accountsstill has a big advantage in attracting customers because savings interest rates are what consumers focus on the most.

Respondents placed slightly less weight on mortgage rates, which may reflect less interest in buying homes as mortgage rates have risen.

As rates have risen, respondents have placed more emphasis on competitive pricing for temporary products such as certificates of deposit (CDs). Thatbest cd'soffer interest rates comparable to the best high-interest savings accounts, but CD owners cannot access their money over the life of their account.

Interest priorities by generation

Respondents from all generations agree that competitive interest rates are most important for savings accounts.

Twice as many baby boomer respondents place a high value on CD rates than Generation Z: 10% compared to 5%. A larger share of Gen Z considers interest on “other loans” to be the most important than any other generation.

Generation Z also sees mortgages least as the most important product to get a competitive interest rate on, probably because they do not yet constitute a significant part of mortgage interest rates.the housing market.

76% of consumers are likely to switch banks if they find a bank that better suits their needs

76 percent of respondents said this was likely to be the casechange banksif they find someone who better meets their priorities, up from 52% in 2020 and in line with 79% of respondents in 2023.

Consumers are willing to transfer their money to a bank that better suits their needs – whether through better interest rates, lower account fees or other factors.

Younger generations change banks more often than older generations. Millennials are the most willing to change banks, while Baby Boomers are the least willing to change, although 67% of Baby Boomers say they would likely do so if they found a better match.

This may reflect younger generations feeling less loyal to their banks or more comfortable switching banks, which in most cases can be a completely online process.

Hassles, changing automatic payments and direct deposits are the biggest hurdles when switching banks

For most respondents, the main reason they do not want to change banks is that they are satisfied with their current bank. In addition, the expected hassle of switching and having to set up automatic payments and direct deposits at a new bank are the most commonly cited barriers to switching banks.

Generation Z was the only generation where the majority of respondents were not satisfied enough with their bank to not switch. Baby boomers are most likely satisfied enough with their couch not to consider getting a new one.

Opening a new bank account is relatively painless, as long as you have the correct personal information on hand. However, setting up automatic bill payments and direct deposits can be more cumbersome and was cited by 14% of respondents as the biggest barrier to switching banks.

The banks must have everything

To keep consumers satisfied, banks must not overlook anything. Consumers find almost all banking functions important. They are looking for accounts with low fees and competitive interest rates. They want their money to be both safe and easily accessible. They expect good customer service and a good brand reputation.

It is good to see that social responsibility is important to a majority of consumers when choosing a bank. People want a bank with environmentally friendly practices, diversity in management and community involvement. These factors may not yet be at the top of the list, but we expect them to become increasingly important to consumers.

Methodical

The Ascent, a Motley Fool service, distributed surveys via Pollfish on January 4, 2024, January 6, 2023, and December 4, 2020. Results were post-stratified to generate nationally representative data by age and gender. Pollfish uses organic random sampling of units.