NEW YORK—A new study shows that Millennials are turning away from big banks in favor of smaller community banks and credit unions.
According to a report from Accenture, community banks last year increased account holders ages 18 to 34 by 5%, while credit unions recorded a 3% gain in Millennials.
On the other hand, large national and regional banks struggled, losing 16% of their Millennial customers.
One of the reasons, suggest experts, is that banks continue to hike fees. MoneyRates.com reported that big banks ($10 billion in assets and above) in the past year have increased fees for account maintenance, overdrafts, ATM withdrawals and other services.
MoneyRates’ semi-annual survey, released in August, shows large bank fees averaged $15.15, compared with $11.51 at smaller institutions. That same report revealed that only 17% of mega-banks offer free checking, while 31% of smaller FIs offer the service.
The Accenture report also shows that Millennials are the demographic most likely to change their primary FI. The study shows that over a 12-month period ending Jan. 26, 18% of Millennials switched FIs, double the pace of other generations. Millennials in the survey indicated that high fees and dissatisfaction with rewards programs as motivations for changing institutions.