Millennials and Banking by Christy Mollhoff
The definition of a millennial is those born between approximately 1980 and 2000. Millennials (Gen Y’ers) have just recently passed up the Baby Boomers as the largest living generation with about 80 million. It’s forecasted that this generation will bring in 46% of all income by the year 2025. Millennials are tech savvy, financially aware and also a little skeptical, so what exactly are they looking for when choosing a financial institution? Consider the following six items to attract Millennials.
1) Technology and the overall experience. Millennials have grown up with digital devices that bundle communication, entertainment, shopping, mapping and education all in one and have always had internet use in home and/or school. They embrace and align themselves with technology, especially smart phones. It’s important to provide these customers with a website and an app that is user friendly, secure and has the ability to perform multiple functions such as accessing accounts, applying for loans and transferring funds. Millennials also value customer service and while they do most of their banking online want to have someone they trust to talk to if needed. Live chat, email and/or 24/7 call center support are helpful in providing excellent service.
2) Millennials socialize while deciding on products and services. This generation tends to seek opinions of others and more than 2/3 of millennials don’t make a major decision until they have discussed it with a few people they trust, including their parents. Millennials like a simplified view of the different products available when researching a Financial Institution’s website. If there are too many products to choose from, or too much irrelevant information, they will most likely go to the next Financial Institution’s website.
3) Millennials are passionate about value, including the values of companies they do business with. Young millennials were praised, sheltered, befriended and carefully guided by their parents to lead well-structured lives based on clear and mutually agreed-upon rules. This has produced a generation that is accomplished, self-confident, group-oriented and optimistic. This generation integrates their beliefs and causes into their choice of companies to support. According to research by Barkley, more than 50% of millennials make an effort to buy products from the companies that support the causes they care about.
4) Millennials are more likely than someone age 50 or above to switch. In the last couple of years, millennials have been leaving the big banks in favor of smaller community banks or credit unions. The most common reasons for changing revolve around fees—the big banks charge too much in account and ATM fees. Millennials are looking for transparency from their financial institution and want accounts with no hidden fees. They also gravitate toward accounts that offer rewards such as cash rebates, higher interest and/or waived fees based on certain qualifications like e-statements and debit card transactions.
5) Millennials want to understand their finances and banking. Financial Institutions should utilize social media to take an interactive approach to educating millennials. Creating video tutorials to share on social media and having a link back to your website is a creative way to educate all consumers on relevant financial topics.
6) Social media posts can be an easy and low cost way to reach Millennials. Not only should Financial Institutions use social media, they should allow their employees access to social media to share corporate posts with their own networks. To attract and retain millennials, Financial Institutions should regularly review their products to verify they have options that fit the needs of this generation. It’s also important for financial institutions to utilize social media, keep up to date on the latest technology and provide quality service that is easily accessible.
This article can be found in the September 2016 edition of the Peak Newsletter. Peak provides consulting services to Financial Institutions. Peak’s focus is to educate Financial Institutions on their core system while providing nationwide best practice recommendations. Please contact Peak at email@example.com for more information or check out our website at www.peakconsultingllc.com.