With an estimated population of 86 million people, the millennial generation is seven percent larger than the baby-boomer generation – and their influence is growing as their spending power increases. Banks and credit unions are beginning to see Millennials as an important demographic to capture. And, if they can capture Millennials now, financial institutions will be able to build long-lasting relationships for the future.
However, Millennials are unlike any generation that has come before them. Technologically savvy, even the oldest Millennials came of age with the Internet, and the youngest Millennials are digital natives who can’t even remember a time when mobile phones didn’t have cameras.
When it comes to technology, mobility and convenience, Millennials have unique expectations that financial institutions will need to fulfill if they hope to maintain relevance to this target market.
Mobile Phones Are Center of Millennials’ Lives
“Banks need to offer or enhance their mobile capabilities for picture-based communication if they are going to remain relevant.” – James B. DeBello, Mitek president and CEO
It’s probably no surprise that smartphones play a critically important role in Millennials’ lives. Millennials are virtually tied to their mobile devices every waking hour. In fact, a study by Zogby Analytics for Mitek Systems entitled, “Millennials, Selfies And The Changing Face of Mobile Commerce,” it was found that 87 percent of Millennials say their smartphone never leaves their side and 80 percent say the first thing they do in the morning is reach for their smartphone.
More than one-third of respondents say they have made a decision on where to spend money or switched companies based on what the organization allowed users to accomplish with a mobile device. That number will only increase over the next few years as Millennials’ expectations grow.
Other study findings include:
- One in three Millennials wish that many important processes in their lives, such as enrolling in classes and signing up for healthcare, could be simplified by taking photos to auto populate data instead of manually entering data.
- Nearly half (48 percent) wish they could do more banking with a snapshot, while 41 percent would like more mobile imaging in retail, 35 percent would like more in insurance and 34 percent would like the credit card industry to adopt more uses for the camera.
- One in three Millennials wish that nearly every industry would adopt more mobile imaging functionality, so they would be able to enter information by snapping a picture.
Highlighting what Millennials see for the future, 60 percent believe that in the next five years everything will be done on mobile devices.
A Picture Is Worth 1,000 Words
Armed with this knowledge, financial institutions must do more than simply provide a basic mobile app in order to capture this valuable target market. Unfortunately, many institutions still provide a mobile banking experience that resembles a shrunken version of the online experience.
To appeal to tech-savvy Millennials and capture their loyalty, financial institutions must start “speaking” their language and communicating through images. The aforementioned survey reveals that the camera functionality on smartphones is a key component of these digital consumers’ everyday lives. From documenting their lives on Instagram, to the rise of selfies and emojis, Millennials are communicating with images more than text – and this trend is reflected in their expectations for mobile banking as well.
Financial institutions can capitalize on these findings by leveraging the functionality of smartphone cameras to create a more robust, sophisticated, mobile experience that provides conveniences not available through other channels. The survey found that more than one in three Millennials (34 percent) have already deposited a check by taking a picture with their smartphone camera, but nearly half of the survey respondents (48 percent) wish they could do more banking with a snapshot.
The Millennial Mobile Banking Opportunity
Not only do millennial consumers expect this type of convenience, it also enables financial institutions to tap a huge market opportunity:
- More than half of respondents (54 percent) say they would deposit checks by snapping a picture and depositing it via a bank’s app, while 34 percent say they have already deposited a check by taking a picture with their mobile smart phone camera—resulting in a potential marketplace with 88 percent of Millennials having used or being willing to use a smart phone camera for check deposits.
- Forty-five percent of Millennials would pay a bill by taking a picture with their mobile device.
- Only 21 percent of Millennials surveyed are currently using mobile imaging to pay bills, representing a huge market opportunity because nearly half (48 percent) of the respondents say they are paying one – three paper bills a month and 19 percent are paying four – five paper bills each month.
- More than half (54 percent) would pay for goods using their mobile device as a mobile wallet instead of credit cards or checks if these services were available to them.
“Business and banks especially need to offer or enhance their mobile capabilities for picture-based communication if they are going to remain relevant. Millennials and their mobile device cameras will ultimately change commerce from the written word, to a picture-based experience,” said James B. DeBello, Mitek president and CEO.
Technology companies and other non-banking institutions are making serious plays for Millennials’ wallet. The key differentiator between those companies and traditional financial institutions is the sophisticated mobile functionality and ability to load information with the snap of a camera.
For example, with Apple’s iPhone 6 launch, the company highlighted its snapshot enrollment, allowing users to simply take a picture of their credit card to automate enrollment in the Apple Pay mobile wallet.
While Millennials’ love of snapping pictures and communicating through images such as emojis could be written off as a fad, the generation is too large to dismiss and their spending power is making them increasingly influential every day. Financial institutions that don’t offer or enhance their mobile capabilities to leverage mobile image capture for business run the risk of missing out on revenue opportunities from long-term customer relationships.
By leveraging the unique capabilities of smartphones, including the camera functionality, financial institutions are able to provide the convenience and innovative mobile experience that Millennials demand.
About the Study
Mitek Systems commissioned a study of Millennials with Zogby Analytics entitled, “Millennials, Selfies And The Changing Face of Mobile Commerce”, which unveils the mobile habits and expectations of more than 1,000 U.S. Millennials.
Ann Reichert is the director of marketing for Mitek, the leading innovator of mobile imaging for financial transactions. She has more than 20 years experience helping technology brands build awareness and adoption of their solutions through integrated marketing.