With ATMs, meet boomers where they live, millennials where they work
Americans are on the move. Literally.
According to research by data specialists at Melissa Data, about 14.19 percent of the American population (about 40 million people) move each year. Of these 23.5 million moved within the same county and 7.7 million moved to a different county within the same state.
That's more than 31 million people moving within the same relatively limited geographic area— and contributing to a total of almost 30 percent of Americans on the move who changed banks along with their address.
This figure, from a new study by TD Bank confirms once again the importance of branch and ATM proximity in bank selection — and by extension, the importance of the ATM to customer retention.
The study of bank changing practices — an extension of the TD Bank Checking Experience Index released late last year — surveyed more than 1,100 Americans to analyze their banking behaviors after they moved.
The survey found that 32 percent of respondents 55 and older opened a new primary checking account after moving, compared with 24 percent of millennials — i.e., adults age 18–34.
Survey participants gave three main reasons for changing banks — none of them terribly surprising: 1) the new bank had branches close to home (57 percent); 2) they wanted to avoid paying fees (27 percent); and 3) the new bank's ATMs were close to home (25 percent).
It's a fine distinction between the second and third items, and it would be reasonable to assume that the fees being avoided are off-us ATM charges. (Particularly since the original TD study found that off-us ATM surcharges ranked a solid No. 1 in the category of "most frustrating fees.")
Those who did not change primary banks after moving cited challenges that included: 1) access to bank branches (13 percent); 2) access to bank ATMs (10 percent); 3) depositing checks (8 percent).
Remote deposit capture will continue to whittle away at the 8 percent number, and the increasing use of remote video teller technology could have an effect on the 13 percent number. As for access to ATMs, it is what it is, and as long as cash remains important to American consumers (and there's no probable end date for that), ATM proximity will remain a significant factor in bank loyalty.
The millennials in the study offered a few interesting side notes and — as is often the case with this group — exceptions.
First, the study found, millennials reported moving more recently than their elders. More than 50 percent said they'd moved within the last two years, compared with 23 percent of Gen Xers (age 35–54) and 15 percent of baby boomers and seniors (age 55 and up).
When preparing to move, millennials placed a higher emphasis on finding new local amenities (such as grocers and drug stores) than did Gen Xers and those aged 55 and up. Interestingly, though, they considered it less important to find a bank close to home — and more important to have one close to their job.
Of millennials who changed banks, 22 percent said they focused on providers close to their workplace, compared with 11 percent for boomers and seniors. Conversely, 64 percent of the older cohort chose a new bank because branches were close to home while a far smaller group of millennials (48 percent) made this their No. 1 criterion.
As with so many other everyday behaviors, millennials defy long-accepted norms for selecting a financial institution. But as usual, there's a logical reason why. In this case it's because they also prefer living in urban areas — by a margin of 62 percent to 38 percent according to Nielsen. In this sense, most are still choosing to bank where they live.
"This survey reveals that consumers across all generations value banking relationships that are convenient for their lifestyle," said Lindsay Sacknoff, senior vice president and head of retail deposit products at TD Bank. "It is important for those who are looking to move or have recently moved to evaluate their banking needs and find the best fit for them — such as finding a bank a with large network of ATMs or stores."
According to Statistic Brain, 81 percent of adults who manage their household accounts have banked online within the past year. Nineteen percent have banked via mobile within the same period.
These channels, which can be used anytime, anywhere, continue to grow in functionality and popularity — especially mobile, as more banks begin to see the imperative and seize the opportunity that mobile banking apps present. And yet, branch and ATM locations continue to be the strongest influencers in bank selection.
When it comes to needs like cash or personal financial assistance, other channels just cannot deliver what the branch and the ATM can.
At a time when ATMs are acting more like branches (i.e., video teller machines that can perform up to 95 percent of everyday teller transactions), and branches are acting more like oversized ATM vestibules staffed with live bankers, it seems that the financial industry has exactly the right rabbits in its hat to create the magic of an ideal customer scenario to suit two immense, dramatically different but equally important customer cohorts.
So ... to paraphrase physicist, neurosurgeon, test pilot, rock musician and sci-fi/action-adventure hero, Buckaroo Bonzai, "No matter where they go, there you are."
photo: ken mayer
Suzanne Cluckey Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and BlockChainTechNews.com www