Banks have changed dramatically over the past several decades, and so have the temperaments of the generations who have used them. It’s no secret millennials are different from their parents.
Born between 1980 and 1995, the world’s youth have unique expectations and relationships with their finances.
This year marks the first time that millennials will have more buying power than any other demographic in the United States. So we thought we’d explore how millennials feel about both their banks and finances, as well as what they truly want from their financial institutions.
There are four essential takeaways to how millennials think about their finances: millennials are open to change, they heavily prefer using their phones, they want to be given personalized recommendations, and they buy based on word of mouth.
1. Millennials Will Switch Banks Quickly
Let’s start with their willingness to change. An MX report notes that millennials don’t feel a particular sense of allegiance to their bank, and are therefore willing to change if they feel their needs aren’t being met.
What does this mean? For one, banks can’t rely on relationships and time to ensure that they retain their customers. The good news for big banks is that millennials are still the most likely demographic to choose them for financial services; however, these banks still have to make sure their customers are entirely satisfied and happy with their services.
They’re not guaranteed to stick by them. This leads us to the next point:
2. Millennials Use Their Phones Heavily
Millennials really want to bank with their mobile devices.
For banks, this means the better their mobile experience is, the better their customer experience is. One clear way forward is for banks to integrate chatbot technology into their mobile apps.
Chatbots provide personalized experiences for banks’ customers, as well as a more convenient and effective banking process. Plus, the technology is only going to keep improving as natural language processing and AI improve dramatically over the coming years. In other words, if a bank picks the right chatbot, it’s essentially all upside.
It’s also worth noting: millennials check their phone on average a whopping 43 times a day. So it might make sense for banks to go where the customers’ focus goes and do a great job while they’re there!
3. “What do you recommend?”: Personal Financial Recommendations
Another interesting trend developing in the younger generation is the desire for financial recommendations. At least 58% of millennials are interested in their bank “proactively recommending products or services”. This number is likely to continue growing. For people over 55, this number was 46% (Accenture).
This provides banks with an interesting opportunity to promote products or services that could help their new clients, while also improving customer relations along the way.
Because millennials are so receptive to the advice, cross-selling and strategic promotions could prove invaluable.
Give them what they want
There’s no denying it: Gen Y wants mobile banking tailored to their personal needs. How can banks stay ahead of the curve? They can make the necessary changes to ensure they leave their young clients smiling as they look down at their phones; it’s where millennials are focused today.