The Banking Experience, Part 1: What Baby Boomers Really Want

Born between 1946 and 1964 (ages 61-79) the Baby Boomer generation was shaped by defining moments like the Cold War, the Vietnam War and the Civil Rights movement. Known for their optimism and "live to work" mindset, this generation helped cement the American Dream as we know it: a house, a career and financial stability.

Their banking journeys began at a branch counter, long before the digital age took hold. Over time, they adapted to using ATMs, then online banking and eventually mobile apps-appreciating these new conveniences while still valuing face-to-face interactions.

Financially, Baby Boomers can be a paradox. On the one hand, 41% say they're confident covering expenses; on the other hand, over half near retirement age have assets under $250,000, creating anxiety about sustaining their current lifestyle in retirement.

In this article, we'll take a look at the banking experiences, preferences and expectations of Baby Boomers, as well as their digital habits and engagement style to uncover how your financial institution can best serve them now, and in the future.

Early Banking Experiences

Baby Boomers grew up in a world where banking meant visiting a branch and speaking with someone in person. Their formative years saw the introduction of ATMs in the 1970s and early online banking in the 1990s, both of which brought added convenience.

Economic shifts also influenced their habits. Inflation spikes in the 1970s, recessions in the 1980s and the 2008 financial crisis taught Baby Boomers caution and skepticism toward new banking technology. In fact, a recent Harris Poll showed that 76% insist that their financial institution have a physical location, which is 11 percentage points higher than Gen X. This attachment to in-person service shows the lasting importance of branches to a large population.

Banking Preferences and Expectations

Baby Boomers make up around 19% of the U.S. population but control over 50% of the nation's wealth. Listening to what they want in a variety of areas and delivering on those expectations is essential for financial institutions:

• Trust & relationships: Baby Boomers highly value personal connections, but 21% feel their bank doesn't understand them
• Convenience: This generation is largely onboard with digital tools. Despite three-quarters wanting an in-person option, only about half visit a physical bank a few times a year or less.
• Costs & fees: While they're not as fee sensitive as younger generations, hidden charges do erode their trust, making transparency and fairness an important factor.
• Security & privacy: Americans over 60 lost more than an estimated $38 billion to financial exploitation in 2023, roughly triple the amount lost from 2022. Fraud is on the rise and getting more sophisticated, creating anxiety and distrust in older account holders.
• Financial education: Surprisingly, 42% of Baby Boomers don't want advice from their banks. Many feel that "anything I needed to know isn't relevant at this point." However, resources related to retirement, healthcare, estate planning and fraud detection and prevention do resonate with them.

Digital Habits and Channel Usage

As for digital adoption, Baby Boomers have come a long way. Going online via computer (39%) and mobile banking (38%) are the preferred methods of banking in this age group. Only one in five prefer to go to a branch, and 3% rely on phone calls.

Top mobile features used most by this generation are bill paying (64%), transferring money between accounts (49%) and depositing checks (42%).

Still, some hesitation and tech overwhelm remain. For example, Baby Boomers are the most skeptical generation about AI, so acceptance of emerging bank tech like AI chatbots may take some time to gain popularity.

And given their relative wealth, it's not surprising that only 4.5% of Baby Boomers have an active Buy Now, Pay Later (BNPL) account. Instead, most prefer to use the credit card(s) they already have-77% of this group owns one, leading all generations. Among credit card holders, Baby Boomers are the generation most likely to maintain a zero balance and not accrue interest (52%). This signifies they have the funds available to cover their living expenses. It also presents a valuable opportunity for community banks and credit unions to offer debit cards with comparable rewards and gain a share of that spending.

Loyalty & Engagement

Baby Boomers stand out as the most loyal banking customers overall, with 82% satisfied with their primary financial institution. They, along with Gen X, are also less willing than Gen Z and Millennials to switch banks in general. The older generations are open to switching to a local bank (49%) or a credit union (47%), yet significantly less would be willing to switch to an online bank (25%) or large bank (20%)-a clear opportunity for community financial institutions. Things that might trigger a switch include poor service, a lack of trust, excessive fees, or missing digital basics.

When researching financial products and services, Baby Boomers' top three sources are a bank's website, word of mouth and Internet searches. For product and service awareness, the best channels for financial institutions to reach this group are at physical branches, on the bank's website and through the bank's mobile app.

Opportunities to Connect and Engage

Overlooking Baby Boomers in favor of younger, more digital-first account holders would be a mistake. Banks and credit unions can better serve this generation by delivering:

• Branch access and banker availability, because a physical branch is more than just a service hub for Baby Boomers. It's where they learn about relevant products and services, and it represents stability and trust in today's digital world. Even those who don't visit frequently find it reassuring that in-person support is always available nearby. Plus, in-person conversations-about everything from rewards-based debit cards to short-term liquidity options -create a relationship with the banker, and the chance to ask more questions can leave a powerful impression.
• Personalized attention and recognition as individuals, not just account numbers. Baby Boomers respond positively when bankers take time to understand their financial goals and tailor solutions accordingly. More than seven in 10 Baby Boomers say they want their financial institution to understand their unique needs. As adoption of online and mobile banking continues in this generation, credit unions and community banks can increase engagement and loyalty by personalizing digital messages about products, services, tools and more.
• Multi-generational services, since it's estimated that Baby Boomers will transfer $72.6 trillion in assets to their heirs, and another $11.9 trillion in charitable donations. This type of planning is on their minds, and a trusted financial institution would be the first place many of them turn to.
• Transparency in relation to fee structures, as well as fraud protection tools and how AI is being used to improve their banking experience. Trust and security are top concerns amid the growth of cybercrimes, identity theft, fraud and the newness of AI.

Community banks and credit unions are especially well-positioned to meet the expectations of Baby Boomers thanks to their local, relationship-driven banking and straightforward tools.

At the same time, investing in digital innovations while maintaining those meaningful connections is crucial to retaining and growing relationships with Baby Boomers as they enter new life phases.

Takeaways

Significant national and international events shaped Baby Boomers' early lives, and today they control half of the nation's wealth. For community banks and credit unions, the top takeaways to keep in mind about this generation are:

• They're mostly satisfied with their primary financial institutions
• They're less interested in switching to a large or online-only bank, but nearly half could be swayed to a community bank or credit union
• Having a physical branch when needed and in-person conversations are important to them. These interactions strengthen relationships and also provide powerful financial institutions ways to connect with them about products, services and financial education.

It's also important to keep the bigger picture in mind: understanding generational differences isn't about dividing account holders. Rather, it's about creating better banking journeys for everyone. By balancing personal service, relevant products and reliable digital tools, community banks and credit unions can better serve this complex group of individuals.

Looking Ahead

In the next part of our generations blog series, we'll take a look at what Gen X expects from their banking experiences.

In the meantime, for more insight into how financial institutions can strengthen relationships and drive growth across generations, download our white paper, Winning the Battle for Deposits.

Read the white paper