Millennials Want Non-Financial Products From Banks and Credit Unions
There's a popular misconception among a lot of people that Millennials hate banks. If that was true, then why would 56% of Millennials give megabanks their checking account business? Feel free to believe that Millennials hate banks, but don't be deceived into thinking they won't consider banks and credit unions for non-financial products like cell phone damage protection and identity theft protection.
Service Ownership by Millennial Segment
In a recent consumer survey, Cornerstone asked consumers whether they have (and paid for) a number of non-financial services that consumers often subscribe to.
Among younger Millennials (in their 20s), more than a third currently have (and pay for) cell phone damage protection and roadside assistance. About a third don't have identity theft protection, but are interested in getting it. Three in 10 don't currently have personal or family data storage services, but are would like to.
Among older Millennials (in their 30s), nearly half have (and pay for) cell phone damage protection, as do 43% when it comes to roadside assistance. Roughly three in 10 don't have, but are interested in getting, identity theft protection and data storage services.
Millennials Would Consider Financial Institutions for Non-Financial Services
Cornerstone also asked consumers who they would consider for a bundle of services including cell phone damage protection, ID theft protection, etc.
Forty-four percent of young Millennials said they would purchase the bundle from Amazon, with a nearly equal percentage saying they would consider getting it from Amazon. No surprise there, eh? More surprising, perhaps, is that 30% said they would purchase the bundle from their bank or credit union--roughly equal to the percentage who said they would buy it from Apple or PayPal. A larger percentage said they would consider buying the bundle from their bank/credit union than would consider Apple or PayPal, however.
Among older Millennials, 40% would purchase the bundle of services from their bank or credit union, while another 48% said they would consider doing so. That 40% puts banks/credit unions right behind Amazon, and ahead of Apple, PayPal, Google, and Facebook.
Banks and credit unions not only miss opportunities to expand their sources of revenue by not offering non-financial services, they're potentially lose interchange when consumers purchase these services using some other issuer's card.
Nearly every community bank and credit union executive team I talk to says that they're concerned about how to stay "relevant" to their customers, members, and prospects. Offering non-financial products--bundled with or without checking accounts--in a step in that direction.
[For more on this topic, see our report Reinventing Checking Accounts]
Director of Research