By Kedran Whitten
Today, understanding millennials’ complicated financial needs is a top priority for banks. But, how do they gain this kind of knowledge? Much of the existing information surrounding millennials points vaguely to new technologies and innovations, void of any concrete avenues for the engagement and retention of the largest generation of customers in America today.
In noticing this lack of useable data, CSI, in partnership with The Center for Generational Kinetics, conducted a national study to learn about the habits, behaviors and needs of millennial banking customers. The results of this study offer an important step toward demystifying the path ahead for banking leadership where millennials (as well as baby boomers and Gen Xers) are concerned, and provide practical and data-driven solutions and strategies.
1. Execute—But Also Communicate—Your Security Efforts
While bank customers of every age, including millennials, appreciate face-to-face communication with their institutions, online banking has become nearly universal.
However, in consumers’ eyes, online banking is not without its faults. At the top of the list of concerns for our study’s respondents is anxiety regarding online banking security. This is true even for millennials, who are noted for their wide acceptance of, and admiration for, technology. In fact, the study found that 44% of millennials say security concerns are the main disadvantage of online banking.
But concerns about security don’t have to be the end of the story. Banks can take action to alleviate these issues and increase usage of their online tools and platforms in the process. Our study found that 47% of Gen X, 41% of baby boomers and 29% of millennials say improved security measures and fraud protection would cause them to use their financial institution’s website or mobile app more frequently.
Clearly, security concerns are more than just customer complaints; they profoundly affect the bottom line for financial institutions, because customers are altering their behavior in response to them. Making continual strides toward providing the best security and fraud protection—and adequately articulating those efforts—won’t just keep current customers happy, it’s the key differentiator in attracting millennial customers. In this age of digital banking, making strides to improve security and fraud protection is more than just an engaging idea—it’s a revenue generator.
2. Millennials Are Constant Bankers … Provide a Constant Experience
There was a time when a trip to the bank involved planning, time and travel, but that’s no longer the case. With the advent of remote and digital banking technologies, customers carry a bank around in their purse or pocket at all times. A quick tap on the bank’s mobile app, and a host of transactions—which once required that trip to the branch—can be completed in an instant.
This new reality has not only made financial transactions easier, but also made them continual. According to our study, 31% of millennials check their account balance daily. In fact, this is the No. 1 activity on mobile banking apps, followed by transferring funds: 51% of millennials say they prefer to check their account balance with their bank’s mobile app and 39% prefer to use it to transfer funds. Since millennial customers are using these services so frequently, it’s imperative that banks of every size have a top-notch mobile interface.
3. Reward, Reward, Reward
Millennials already use online banking services in great numbers. We know they want these tools—but is it possible to further move the needle and increase usage? Definitely.
One factor can drive the most usage with millennials: rewards!
According to our study, rewards programs are the No. 1 way to increase millennials’ online banking usage—ahead of increased security. The results showed that 46% of millennials say they would absolutely use their bank’s online services more often if the institution had a rewards program for usage.
Programs that increase customer savings, like prize-linked accounts or gamification to help customers meet their financial goals, are already gaining traction. Strategies like these foster a connection with millennial customers and engage them beyond the traditional bank-to-customer relationship.
Looking ahead, millennials will continue to dominate the conversation surrounding customer acquisition and retention. By implementing these three strategic initiatives, your institution can forge a clear path forward. For even more insight on the banking habits of millennials and other generations, download CSI’s full report, Banking Trends through a Millennial Lens.
Kedran Whitten is chief marketing officer for CSI. She has more than 20 years of marketing leadership experience, and her background includes driving revenue growth, customer satisfaction, brand awareness, product pricing and competitive positioning.