The share of young users who pick fintech over traditional banks has doubled since 2020, to 12%. Today, only 25% of the youngest generation, Gen Z use a megabank for their primary checking account, down from 35% in 2020.
Generally, young consumers, including Gen X, Millennial, and Gen Z groups, have chosen digital banks as their primary checking account provider, rather than traditional megabanks.
47% of executives at U.S. banks and credit unions have identified fintech as a “significant threat” in the coming decade.
The report, conducted by data analytics firm FICO, identified five competitive threats to traditional banks and credit unions and identified what they need to do to remain competitive and attract young users, including overdrafts, savings and investments, buy now, pay later, niche neobanks, and open banking.
For younger consumers, fintech is successful through personalization. Fintech offers these young consumers a portable and personalized service from their banks, coupled with offers and solutions that help them build and secure their financial future.