A lack of financial understanding means that millennials are potentially losing out on the opportunities and advantages provided by building societies, research from Intelligent Environments concluded.
The study, which questioned 2,000 millennials on their attitudes towards the building society sector, found 73% of Millennials didn’t know the difference between a bank and building society, nearly half (48%) couldn’t name any advantage and a third (33%) stated that they could see no reason to use a building society.
Simon Cadbury, director of strategy & innovation at Intelligent Environments, said: “These findings are a wake-up call for the building society sector. Clearly there is still much to be done as the industry ensures it remains as relevant and central to the lives of Millennials as it has been to previous generations.
“At its heart, this is an issue of customer engagement – and building societies must find new, innovative ways to interact with its customer base, ensuring they are delivering a service that answers both current and future demands.”
Around 45% were unsure of why they’d use a building society instead of a high street bank, 37% considered building societies as “old-fashioned” and 29% said they were “irrelevant”.
A total of 22% of millennials thought building societies lack online banking tools when actually, 90% of the UK’s top 20 building societies offer some form of online functionality.
The solution may lie in tech, with nearly a third (32%) saying that they would be more likely to open an account with a building society if they offered an ‘easy-to-use’ smartphone app; while 43% would consider opening an account if the building society offered online management tools
Hilary McVitty, head of external affairs at the Building Societies Association, said: “With more than half of respondents wanting to know more about building societies, this research shows the enduring power of member-ownership.
“With more than 23 million members, building societies engage most directly with Millennials when they are looking to buy their own home. Today, one in three mortgages from our sector is for a first-time buyer, with an average age of 32.
“Many societies are partnering with a range of innovative technology providers to engage customers and there is always more to do. Consumers are clear with us that they want both face to face and digital options.”