Microsoft Study Finds Technology Is Key To Banks Garnering Divergent Customer Base

November 3, 2009 12:37 p.m. EST

Boston, MA (AHN) - As retail banks struggle to recapture customers in the wake of the global economic crisis, emerging generational differences in the way consumers wish to bank will require financial institutions to adapt to the divergent needs of their customers, according to a study released on Tuesday by Microsoft.

The Microsoft "Millennials and Baby Boomers Banking Channel Preference Survey 2009," found that adult millennials (ages 18-29) and baby boomers (ages 45-63) prefer very different channels for their banking activities. These preferences vary from high-touch, in-person experiences at the branch to more automated experiences on the Web, on mobile phones or at interactive kiosks.

"Generational differences are a challenge for banks as they try to create consistently positive, integrated banking experiences, regardless of channel," said Colleen Healy, general manager, U.S. Financial Services, Microsoft.

"Banks are building loyalty with boomers today primarily through in-person retail branch interactions, while creating new offerings via online and mobile channels to attract millennials, the next generation of customers."

The study finds that different generational groups respond to very different preferences for conducting banking transactions.

Millennials represent an untapped customer base for banks, but they have specific high-tech needs in terms of how they communicate and network with their financial institutions. For example, they are much more likely than baby boomers to use Web banking (49 percent versus 35 percent) and to find online service capabilities to be very important when researching a new bank (54 percent versus 42 percent).

Baby boomers, on the other hand, are much more likely to prefer banking transactions in person at a branch (44 percent versus 32 percent), and half (50 percent) report that they never bank via the Web using a personal computer or phone browser.

However, both millennials and boomers found similarities in their criteria for choosing a new bank. Customer service ranked as the highest priority for both millennials and boomers, followed by rates and fees and superior security against identify fraud.