Banking faces an existential crisis, which bankers must respond to by embracing innovation and focusing on customer experience, said Julieann Thurlow in her final comments as 2023-24 chair of the American Bankers Association.
“A major risk is building,” she said last week during the ABA annual convention in New York City. As we look to the future, we need to ensure that we are relevant to the next generation, to the mobile-only generation. Consumers’ relationships with their money have become fractured.”
Thurlow noted her children don’t use their checking accounts and instead prefer to receive points from large credit card providers. “Tech companies have taken the friction out of our products and moved consumers and their money to their balance sheets, and that’s outside of the regulated industry,” she noted.
Thurlow said bankers should respond by prioritizing innovation. Financial institutions must understand why more consumers are using nonbanks through customer journey mapping, customer-centered thinking and using AI to remove friction, she added.
Thurlow’s comments are supported by a recent study from digital banking provider Apiture and The Harris Poll. According to the report, only 6 percent of Generation Z and 8 percent of millennials list a local bank as their primary financial institution. According to the study, though 79 percent of Gen Z and 69 percent of millennials had already chosen a large bank as their primary FI, 52 percent were willing to switch to a community bank.
Eighty percent of Gen Z and 81 percent of millennials, respectively, said digital banking was at the center of their banking preferences. The majority of both generations cited it as a top need for choosing a new bank.
Thurlow, president and CEO of Reading Cooperative Bank in Massachusetts, briefly described the ABA’s work during her time as chair, including its successful attempt to reduce Basel III capital requirements and strong support of the Access to Credit for our Rural Economy Act. She called on those in attendance to challenge themselves and their employees to be involved in industry issues.
Thurlow’s comments came after the ABA named John Asbury chair for its 2024-25 membership year.
