Millennials More Likely to Switch Banks
Millennials are two to three times more likely to change to a new financial institution than people in other age groups, according to a new FICO survey. Participants between the ages of 25 and 34 were also twice as likely to switch banks this year compared to the results from last year’s survey.
The desire to switch may be largely in part to the low fees associated with online and mobile-only banking. Millennials said getting lower fees was their top reason for switching financial institutions: 45% for age 25-34 compared to 36% of age 18-24.
Another reason why Millennials are apt to switch banks is because they have had a bad experience after missing a payment. Many young adults struggle with money management as they enter the work force. In fact, a survey from 2015 showed that college students face as much as $710 a year in overdraft fees. Low fees and forgiving payment options could help attract Millennials to new banks.
Not surprisingly, Millennials also reported a strong interest in online-only banks. 16% of respondents said they were considering opening a checking or savings account with a web-based bank within the next year. Despite the high interest in online-only banks, just 2% of survey participants said they had an account with one of these institutions.