Since a 2011 FDIC survey found that millions of American residents are either unbanked and underbanked, relying more on alternative services for their banking needs, many financial institutions have worked to appeal to these customers and offer more options such as prepaid debit cards or payday-like loans.
Now, it appears that it is Millennials who prefer much of these banking options. An article in USA Today explained that a recent survey found that almost half—45 percent—of participants who were between the ages of 18 and 34 used at least one form of an alternative financial service, including prepaid cards, check cashing, pawn shops and payday loans.
The article explained that many of Gen Y is stuck with student debt that isn't expected to be paid off anytime soon, and these products are known for having none of the sneaky fees that banks may have. Additionally, convenience has become increasingly important for more recent banking customers, and a major factor when deciding between banking options.
"It's flexibility and controllability that's really important for Millennials," Ken Rees, president and CEO of Think Finance said to USA Today. "Banks don't have great products for people who need short-term credit. They're not really set up for that."
However, with this information, banks can offer more convenient and accessible options to borrowers as Millennials become a greater percentage of banking customers. With loan application software, financial institutions can improve their processing time, whether it be for payday loans or other forms, to continue to attract all generations of customers.
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