A survey from Access Softek, Inc., a digital banking platform provider, found that only eight percent of consumers have investment accounts through their bank or credit union. However, for the remaining group of respondents who had investment accounts elsewhere, 47% said they would consider switching to their bank or credit union if they offered integrated investment accounts.
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Of those that would consider a move, the 18-34 age group was over two times more likely to make the switch than older respondents. This highlights that investing is not only an important growth opportunity, but one that could help shift the FI’s demographics toward a younger audience.
This presents an incredible opportunity for financial institutions to expand into the $73 trillion investment market. Offering integrated wealth management services can not only help community financial institutions attract new deposits, but it can also present opportunities to cross-sell checking accounts or loans to further promote the institution’s growth.
Simply by offering integrated investment accounts, banks and credit unions could pose a huge threat to investment firms and fintech apps. When asked what would encourage them to change, 20% of individuals said they would prefer an automatically managed investment account (a robo-advisor).
“Offering integrated investment accounts presents possibly one of the biggest growth opportunities for community banks and credit unions today. Credit unions and community banks routinely rank as the most trustworthy of financial institutions, and consumers have expressed interest in expanding relationships with these institutions if they offer the right services,” said Chris Doner, founder and CEO of Access Softek. “Essentially, financial institutions can use investing to meet three of the biggest challenges facing them: reduce the average age of the customer or member, attract new accounts and diversify revenue.”
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While these results show promising opportunity, they simultaneously highlight a potential threat to financial institutions. When respondents were asked if they would leave their current bank or credit union for another one that offered integrated investment accounts, 42% said they would consider it. Financial institutions that do not offer integrated investment accounts must take note, as they risk losing close to half of their members if they do not keep up with this demand.
“This survey issues a challenge to credit unions and community banks to step up, overcome inertia and provide the services that so many are forced to go to bigger banks for,” Doner said. “When community institutions combine the same digital services with their higher service levels, they will turn the tide competitively and become a threat to the large banks that have so long been a threat to them.”
Access Softek surveyed more than 500 consumers with investment accounts through Google Surveys between July 22, 2020 and July 26, 2020. The survey sought to better understand investment habits and preferences.
