Bank loyalty is apparently on the wane as the total number of households with no primary banking relationship jumped from 7.6% in 2005 to 10.6% in Q3 2006, with younger adult consumers leading the rebellion, according to a new analysis of data from the Claritas Market Audit.
The 2006 market audit's results (broken down by age) showed that 12.6% of the so-called Generation Y (under 30 years old) households said they had no primary banking institution. Other age groups, such as Generation X (age 30-39) came out at 11.4% while Seniors (70+ years old) came out at 11.1%, Baby Boomers (aged 40-59) came out at 10.4%, and Empty-Nesters (aged 60-69) came out at 8.6%.
Figure 1: No primary financial institution
Source: Claritas Market Audit, Q3 2006
Banking as a commodity
In many respects, asserted consultant Julie Pabich, banking is currently considered a commodity among consumers, especially younger ones, who are least likely to be loyal: "But the numbers are going up across all age groups as people face a variety of promotions, and, as a result, have a lot of alternatives."
In fact, the results for 2006 were also up markedly compared to 2005, when Generation Y households were leading at 9.4%, followed by Generation X at 8.3%, Seniors at 7.7%, Baby Boomers at 7.2%, and Empty Nesters at 6.5%.
More loyal with age
Of those respondents who reported having a primary financial institution, the majority across all age groups said they would be "very likely" to recommend it to a friend or relative. But, of those, the lowest percentage was among the Generation X and Y groups at 53% and 54% respectively. Baby Boomers stood at 58.3%, while Empty Nesters were 67.4%, and Seniors were 67.8%.
As for those who would be "very unlikely" or "somewhat unlikely" to recommend their primary institution to a friend or relative, the younger generation led the pack with Generation Y at 6.8% and Generation X at 5.9%. They were followed by Baby Boomers at 4.9%, Empty Nesters at 2.7%, and Seniors at 2.8%.