Younger bank clients are seeking more digital offerings from financial institutions as interest in physical bank branches declines, a new report shows. 

“To remain relevant to digital-first consumers, [financial institutions] need to offer an intuitive online and mobile banking solution and deliver experiences that younger consumers expect,” Chris Cox, chief operating officer at digital banking solutions company Apiture, told Bank Automation News.  

Younger Americans prefer real-time, digital banking offerings, according to a recent report from market research company The Harris Poll, which surveyed more than 2,200 Gen Z and millennial bank customers, and a June report from Apiture.

Nearly 57% of Gen Zers and 60% of millennials believed branch locations were imperative, though 45% said they could not remember the last time they visited one, the Apiture report showed. 

However, 53% of Gen Z and millennials said digital offerings are a top priority when choosing a bank, according to the report. 

Modernizing digital features and updating banking platforms with newer technologies demonstrates a commitment to meet these consumers’ needs, Apiture’s Cox said. 

The most important features for Gen Zers and millennials, the report said, are: 

• A user-friendly online banking website; 

• An intuitive mobile app; 

• Digital customer support; 

• Peer-to-peer payment solutions; 

• Budgeting and expense tracking tools;  

• Credit score monitoring; and  

• Digital wallets. 

Branch investment 

In the third quarter, U.S. banks invested in their digital capabilities to meet client demands. 

The $686 billion U.S. Bank increased its tech spend to $524 million in Q3, which includes modernizing branches rather than adding more. 

“Our strategy focus is to create density in the highest growth areas within our current footprint, rather than use branches to expand out of our footprint,” U.S. Bank President Gunjan Kedia said during the bank’s Oct. 16 Q3 earnings call. “The reason for that is that we have built some very good, strong digital capabilities that allow us to deliver our services nationally.”  

Similarly, $3.2 trillion Bank of America will add 165 bank branches by 2026 across the country as well as modernizing its digital offerings within the branch.  

“We are reaching more and more clients through the expansion and modernization of our financial centers,” Aron Levine, president of preferred banking at Bank of America, said in a Sept. 23 release.  

“While most clients are using our digital capabilities for their everyday banking, they are visiting our centers for in-person conversations about their more complex financial needs and advice on their life priorities and financial goals.”  

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