Consumers Can’t Get No Banking Satisfaction; Millennials Planning Better for Retirement
"Although money management remains a challenge for many households, there is an openness to new ways of doing things."
Credit unions take note.
Satisfaction with finances remains elusive for most banking consumers, and millennials prepare better for retirement than their parents, according to respective surveys from Fiserv and J.D. Power.
The study from Brookfield, Wis.-based financial technology company Fiserv revealed only 37% of consumers are satisfied with their financial health, and nearly one in three consider money management a burden. Results from the report, Expectations & Experiences: Household Finances, conducted online by The Harris Poll, highlight opportunities for services that address money frustrations and offer enhanced security, convenience and consolidated financial management.
“Although money management remains a challenge for many households, there is an openness to new ways of doing things,” Devin McGranahan, senior group president, Billing and Payments, Fiserv, said. “While consumers already rely on mobile access and transaction alerts, financial institutions and billing organizations can create more intelligent experiences that build loyalty, instill confidence and improve financial management through enhanced bill payment reminders, real-time payments and instant fraud alerts.”
Of the 30% of consumers who think managing their finances is a burden, 59% perceive the task as an obligation and 47% say it is a reminder of financial difficulties. More than 10% have taken a cash advance or short-term loan in the past year, and 38% would have difficulty or be unable to repay a $500 loan.
Inserting a chip card is now the most preferred way to pay (36%), topping other forms of payments such as swiping (30%), cash (17%), and check (8%).
Sixty-four percent receive transaction alerts. A sense of security (67%) and previous fraud (43%) are the most common reasons for using transaction alerts. More than twice as many early millennials (60%) use mobile apps to track spending.
Thirty-four percent of consumers and 48% of millennials said the ability to manage all their financial accounts using a single online location or app was of interest. Few consumers currently use aggregation services to track spending (8%).
Thirty-five percent of consumers would be interested in the ability to transfer funds from one ATM to another, and 62% of millennials report interest in this option. Cardless cash solutions for ATM withdrawals appeal to 37% and over half of millennials.
More than two-thirds of consumers would be interested in a security program to safeguard mobile activity, while 56% indicate interest in voice, fingerprint, palm or retina scan to verify identity.
Meanwhile Costa Mesa, Calif-based marketing information firm J.D. Power’s 2018 Group Retirement Satisfaction Study, found millennials are most likely of all demographic groups to have set specific retirement goals and have the highest amount of savings—relative to age—in group retirement plans.
The inaugural study evaluated participant satisfaction with providers of group retirement plans, such as 401(k)s, based on six factors: interaction across live and digital channels; investment and service offerings; fees and expenses; plan features; information resources; and communications.
“The fact that many in the youngest generation of plan participants are actively preparing for retirement now sends a clear message to providers,” Mike Foy, senior director of the wealth management practice at J.D. Power, said. “They need to be focused on upping their game on their digital and mobile offerings to meet the expectations of this digitally engaged customer segment. With roughly $5.3 trillion in wealth currently sitting in 401(k) plans, getting the group plan participant satisfaction formula right now is crucial for the future of the wealth management industry.”
Among all generations of group retirement plan members, 51% of millennials have set specific retirement goals, compared with just 44% among both Gen X and Boomer participants. Of the 51% of millennials who have set goals, 83% say they believe they are on track to meet them.
Sixty-one percent of millennials have at least $25,000 in total retirement savings, and 27% of them have more than $100,000, with an average of 30-35 years before retirement. By contrast, 75% of Boomers have more than $100,000 in savings with an average of just three years until retirement age. The average Boomer will hit age 65 with just 3.4 years of current income saved, far short of the 10 years some experts recommend.