Millennials are flexing their demographic muscle and reshaping customer service in just about every industry. Banking is no exception and today’s financial institutions are employing several strategies to retain the business of this sometime-elusive group.
Millennials’ habits and preferences have been exhaustively detailed. They are difficult to engage, less trusting of traditional institutions, lacking in brand loyalty, favor brands that mirror their values, and are largely open only to marketing messages that speak to their personal experiences.
They are the first digital-native generation. Millennials rely on technology, and particularly their smartphones, to run every aspect of their lives, from car rides, to food, to dating. The first generation to grow up with the internet holds perspectives shaped by their interaction with technology. They expect to manage their banking as easily and conveniently as ordering a ride.
Financial institutions are moving to meet this expectation. After all, millennials, who number about 70 million in the US, are poised to make up 75% of the workforce in the next ten years and to inherit $30 trillion over the next 30 years.
Studies show that that over 80% of millennials own smartphones and more than half prefer a digital relationship with their financial institution to a physical one. Many seldom go into bricks-and-mortar branches and they don’t want to call bank reps or send emails to get the answers they need.
Financial institutions are responding by creating one-stop-shopping mobile apps that consolidate financial needs in one place: tracking spending, transferring money, payment vehicles, loan management, deposits, auto transfers, applying to credit, and so forth.
Banking apps are also offering integrations with peer-to-peer payment platforms like PayPal and Venmo that allow people to split restaurant bills or complete other business purchases. Millennials have readily signed up to use these platforms that compete with traditional banking. several financial institutions have created Zelle, their own proprietary peer-to-peer payment platform, to rival independent third-party options.
Ease and Convenience
Research also shows millennials value innovation and are ready to give their business to brands they perceive as innovators. A study by PricewaterhouseCoopers revealed that millennials are 50% more likely to trust non-traditional businesses with a history of innovation.
Banks are creating more engaging mobile experiences and applying proven UX (user experience) principles to make apps simple to navigate and easy to use. They have organized information so it’s easy to find, convenient to interact with, and relevant to the user. For example, instead of providing a dozen credit card options that may send potential clients scrambling to other sites, it’s much more effective to offer three options that match the needs of the users.
Millennials deal with some difficult economic circumstances. They entered the job market during a brutal recession, they face hyper-inflated housing markets, high student-debt loads, and the challenges of the gig economy. Many feel vulnerable. They want financial advice and information from banks, but they also crave relevancy.
Apps and state-of-the-art document generation software make it possible to customize marketing messages and reach users with relevant messages at the relevant time. A 32-year-old struggling to pay student loans needs a different message than a 60-year-old planning for retirement. SMS messages and banner ads are great for delivering personalized prompts for renegotiating a loan, offering new financial planning tools, promoting mortgage rates, and so on.
Research shows that while most customers are wary of institutions that collect data on them, millennials are open to sharing personal information if they perceive it will be used transparently and provides value.
All communications with millennial customers need to take this group’s needs and perspectives into account. Check with the experts at Lanvera to hear how we enable financial institutions to communicate with their customers as individuals.