The millennial generation, those people born roughly between 1982 and 2000, is by many accounts the fastest-growing generation ever. At least as large as the baby boom generation, estimates place this group of potential bank customers at 81 million, or more.
We stress the word “potential.” In a recent survey of 10,000 millennials, Viacom Media found that 71% indicated they would rather see the dentist than hear what banks have to say. Among the 10 least-loved brands in this group, four were mega-banks. Perhaps most disconcerting for the future of banking, 73% prefer to use an alternate financial channel such as Google, Amazon, Apple, PayPal or Square rather than work with a bank.
Yet, additional surveys show that nearly half of this group still prefers branches for financial discussions and decisions. With many of them now reaching their 30s (a common age for marriage, child-bearing and home buying in this age bracket), banks have no time to lose. They must solidify their relationships with existing millennial customers now, and work hard to win over the ones that are slipping away. The challenge is that millennials grew up in the age of the Internet, email and social media and must be marketed to in a different manner than their parents.
In a recent Accenture study, 58% of North American millennials said they are interested or very interested in proactive recommendations from FIs for new products or services they might find useful. The caveat to this impressive response is they want these recommendations to be made withconsideration for their existing accounts. This is a telling point, and it provides two strong hints for reaching millennials. First, blanket marketing, where customers or prospects receive mailers for bank products that they might already use, won’t cut it with this crowd. Second, for millennials to want advice that considers their existing business, they must assume they will be engaging in repeat business. Banks that can target these people with useful, relevant offers will increase their chances of being rewarded with loyalty.
Of course, this approach only works with existing millennial customers. A bank still has to gain their respect and their business before its personnel can offer those informed recommendations. To explore this issue, we’ve analyzed data gathered from hundreds of financial institutions that we interact with in the U.S. and Canada. Based on our research and the experiences of our clients, we see clear preferences emerging.
Millennials want the majority of their bank experience to be touchless, revolving primarily around digital media. When they are ready to make big financial decisions (which represent most banks’ major profit drivers), they want branches to be technologically enabled and responsive to their preferences. They also want branch personnel to be knowledgeable, sincere and respectful.
In line with these principles, we suggest that banks provide millennials with the following services outside the branch:
Mobile apps with check capture, account-to-account transfers and preferably bill pay.
Real-time text alerts for specific events (e.g. deposit, low balance, etc.).
Online loan quotes, preferably with direct or linked assistance (such as a “perfect car” selection tool) and a minimal requirement for personal information.
Online account opening and bill pay.
Online and/or mobile appointment setting, with email and text reminders, for those times when a millennial is ready to sit down at the branch.
In addition, banks should develop a healthy social media relationship with their millennial audience. We say healthy, because too much sharing is as bad for businesses as it is for individuals. For example, posting valuable financial news to LinkedIn, tweeting when interest rates drop (or might go up) or announcing helpful bank news on the bank’s own Facebook site are all positive ideas. Spamming customers with irrelevant email messages, or posting repeatedly to customers’ Facebook walls, is not.
In the Branch
When millennials do visit the branch, banks must be on their high-tech toes or they risk pushing the customer into the waiting arms of another bank – or an online service such as PayPal. For starters, the digital appointment-setting tool we mentioned above should also be present in the branch. Customers who come in and find the wait too long, for example, should be able to use a kiosk (or their phone, using the bank’s free wi-fi), to confirm a future appointment. If lacking a digital appointment-setting system, banks should at least have a digital mechanism for letting millennial customers know how long they will wait to see a specialist.
Lobby sign-in systems should also be digital (tablets or kiosks) and not paper-based, with a confirmation upon sign-in that millennial members are “in the digital queue.” Preferably, digital sign-in systems should also be integrated with and able to collect information from customer service sessions. This data collection will provide valuable insight into the needs of millennial (and other) customers, helping banks respond proactively with future recommendations.
At each juncture of the experience, interactions should be courteous and thoughtful, and should send a clear message that service is genuine with no unspoken agendas. Anything less, and distrustful millennials will take their business elsewhere.
While millennials may be worlds apart from their baby boomer parents in terms of how they engage, at their core, they want the same thing: to be respected as an individual and not treated as a number, to receive customer service that is informed and authentic, and to hear advice that is trustworthy and relevant. At the end of the day, these are principles banks should already exhibit in all their customer engagements.
Ms. Deen is chief operating officer ofAlpharetta, Ga.-based Financial Management Solutions, Inc. (FMSI), which provides financial institutions with business intelligence and performance management systems for efficient branch staff scheduling and lobby management. She can be reached at [email protected].