Millennial Banking Consumers Are Unique, But Not That Different

The key to reaching and serving Millennials is to understand the similarities and differences of this important segment. Is your organization prepared to meet the needs of the digital native ... who also wants personalized attention?

Millennials, millennials, millennials – media outlets are filled with stories about them … from what they want and how they dress, to where they live and what they buy. Perhaps because they represent another ‘boom’ generation with incredible potential to drive revenues for several decades, everyone, from financial institutions (FIs) to fast food giants, wants to get inside their heads. This often results in them being lumped into specific categories and portrayed with broad stroke generalizations.

In some cases, such as their digital orientation, this is reasonable. Millennials grew up surrounded by technology, and it is indisputable that they are digitally focused. This engagement extends to financial institutions, as well. Accenture’s 2014 North America Consumer Digital Banking Survey found that 94% of millennials are active users of online banking, and 72% are active mobile banking users.

Nevertheless, a confirmed digital mindset doesn’t mean millennials share an abundance of characteristics in all areas. At FMSI, our client discussions regarding customers have shown us that, while millennials are a unique group, they are far from ubiquitous. They actually have more in common with earlier generations, in certain areas, than many banks and credit unions might assume.

To reach millennials effectively and keep them as customers, we believe banking must endorse digital, but act personal. In other words, reach millennials through their preferred channels at every possible level, but use proven, personalized customer relations tactics rather than dismissing them as digital mavericks – that no branch can capture.

Millennials Speak Up

The Accenture study referenced above, which was compiled from nearly 4,000 surveys of North American banking customers, illustrates our point. According to the published report:

  • Millennials want more customer service: 55% of North American millennials want banking to help them purchase a car, with enhanced services such as personalized recommendations, and not just give them a loan. When it comes to a home purchase, 57% want referrals to realtors and help finding suitable homes in their chosen price range and area.
  • Millennials want proactive, practical advice: 58% of North American millennials are interested or very interested in having banks and credit unions proactively recommend products or services that might be useful to them, taking into consideration accounts they already have.

Although the response to these questions was far less enthusiastic in the 55+ age group, it was comparable to respondents aged 35-55. Within this group, 45% wanted expanded assistance with car buying, 47% desired it for home purchases, and 53% wanted proactive, informed recommendations for products and services.

In other words, many current bank and credit union customers/members in the prime of their lives want the same things millennials want – banking organizations that care about providing advisory benefits in the branch and that consider their needs before they start selling.

Service with a Digital Smile

The difference, of course, is that millennials aren’t entering the branch as frequently as the next oldest age group … but that’s not an insurmountable challenge. Savvy financial institutions can prepare a core sales strategy – one that echoes what many sales strategists have been preaching for years – and then adapt the best outreach approaches for each target market. Here are a few suggestions that focus on millennials:

  • Make digital more personal: The desire to be treated as an individual rather than a number is universal, but millennials’ interaction with digital channels likely makes them more cognizant that some companies are commoditizing them. At every touch point, from email and Facebook to in-branch interactions, contact should be fine-tuned and genuine, and recommendations should be personalized to the services or products someone might actually need.
  • Walk the talk: It’s not enough to offer online and mobile banking. banks and credit unions should look beyond these vehicles and incorporate enhanced services with a digital delivery mechanism. One of our clients, AltaOne Federal Credit Union, has experienced success deploying new digital tools, including mobile apps, a free personal financial manager, and broad-based, online banking such as bill payer, mobile check capture, online account opening and support for Popmoney. Alta one has also built a significant social media presence.
  • Make branch visits enjoyable: Despite the gloom and doom about millennials and branches, they aren’t abandoning them – yet. In the TD Bank Financial Education Survey of more than 2,000 millennials, 49% reported they rely on in-person branch visits for making their financial decisions. Banks and credit unions can encourage branch visits by leveraging digital approaches here, as well. One example would be implementing scheduling technologies that let customers make advance appointments with a designated specialist, online or from their mobile device. Such a service provides another digital channel along with the reassurance of minimal wait times.

These targeted strategies, combined with more broad-based marketing tools such as a general social media presence, will help financial institutions build credibility with millennials, not only as an organization that is digitally connected, but also as one that takes the time to understand customers individually rather than pitching them as a group.

This is an important task, and one that banks and credit unions should undertake as soon as they can. Already, per the Accenture survey, 77% of millennials say they would bank with a non-traditional company or service if banking services were offered. With such services approaching on the horizon, financial organizations have no time to waste.

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