A large portion of millennials — people born between 1982 and 2004 — are either just beginning or are already at the peak of their careers. At this point in time, they’re ready to accept financial and investment advice, but the financial service industry needs to take a different approach. Banks need to understand this new way of life in order to implement drastic changes to their system to accommodate the most tech-savvy, not to mention the most tech-dependent, generation of all time.
Everything Needs to be Online
The increasing accessibility and affordability of the Internet have forced businesses to adopt an online persona in order to maintain market share of the largest generation today. The financial service industry is no exception — millennials are much more likely to use banks that provide online or mobile channels. When everything needs to be online, we mean everything — they’re most likely going to check a bank’s business hours or distance from home via websites like Opening Times before even considering making the trip.
Limited Customer Engagement
Only around 66% of millennials admitted to visiting a bank in the last six months, and only 30% are fully engaged with their primary bank. This isn’t due to anti-social tendencies or public awkwardness, but rather an unwillingness to have direct contact with banks. Face-to-face communication can be stressful to people, especially if an interaction is centered on a dispute. Millennials are the generation that’s most likely going to voice their opinion about a product or service, but they’re also the least likely to do it in person. Millennials are more likely going to voice their dissatisfaction via digital channels rather engage with customer service.
Two-Way Communication
Companies are building online personas in order to get closer to the young generation. To the untrained eye, a corporate social media account is just a cost-efficient way to promote products and services, but it’s really much more than that. Communication via digital channels is the new norm, and millennials want their opinions to be heard. The classic “take it or leave it” approach of companies is no longer suitable in this day and age. Only banks with online support have a chance at retaining millennial customers.
Brand Loyalty is a Thing of the Past
Unlike the many preceding generations, millennials don’t stick to a brand out of loyalty. This change in behavior is due to the hundreds of similar offers they can find with a single internet search. Value must be proven through action rather than faith, and millennials won’t hesitate to leave something they’ve used in the past if they have reason to doubt its value for the future.
If Their Bank Gives Them Trouble, They’ll Move Without Hesitation
If they have reason to doubt a bank’s services, they’ll bring their cash to another without a moment’s thought. Millennials switch banks at a rate almost 2.5 greater than Baby Boomers and 1.5 times more than Generation X. The underlying motive for moving to another bank is tri-fold: rewards, fees, and location. Higher interest, cash-back upon purchase, no or low administration fees, and convenience of access play tremendous roles in considering whether they want to switch banks or stay put.
Transparency Trumps Privacy
Despite the increasing call for information security and privacy, millennials are the generation that is most willing to post private information for anyone to access. This generation has a greater appreciation for service quality, prompting them to willingly sacrifice privacy in return for maximum service. A Salesforce study concluded that more than 60% of the millennial respondents didn’t object to sharing private information with businesses in order to help them create a better and more personalized product or service.
