Choosing a financial institution can be a laborious process for many consumers. Consumers want to bank with an institution that offers them advantageous financial opportunities, provides peace of mind, creates a sense of empowerment and trust, and delivers financial guidance when necessary. While banks and credit unions may have fundamental differences in the manner in which they operate, both institutions share a desire to be every consumer’s financial home.
However, a host of factors influence this decision for consumers—and rightfully so. Consumers are faced with a bevy of options, so what factors help shape consumer attitudes toward financial institutions and the services they offer? Is it income? Is it age? Why do some consumers mistrust banks? What types of people join credit unions? These are all questions worth exploring—especially if we want to grasp consumer preferences about financial institutions.
What is the research about?
In this report we analyze consumer usage and preferences using McKinsey & Company survey data from 2013. The data were compiled from thousands of respondents and were driven by requesting the following information:
- Percentage of household cash with primary financial institution.
- Account types owned by institution.
- Reasons for shifting holdings between institutions.
- Agreement with statements regarding primary financial institution brand.
- Frequency of various banking transactions/activities.
- Agreement with statements regarding primary financial institution’s services.
This is a partial list. Full lists of information requested can be found in the research report.
What are the credit union implications?
Credit unions can’t prevent every member from shifting their funds or closing their account, but the current outlook for growth is extremely promising. Research is showing how effective credit unions are at creating trust with their members. As long as this trust is sustained, there is no reason to think credit unions can’t grab more market share. We have learned that consumers choose financial institutions based on income, age, and attitudes toward service offerings. These preferences are always subject to change. The responsibility will be on credit union leaders to ensure they don’t.