How Can Banks and Financial Institutions Reach Millennial Consumers?

How Can Banks and Financial Institutions Reach Millennial Consumers?

When you hear the word millennial, what age comes to mind? Most people think millennials are college-aged kids, but millennials are actually defined as anyone born between 1981 and 1996 (ages 23 to 38 in 2019). The financial services industry is increasingly becoming more hard-pressed to uncover how they can earn the business of millennials, who are quite different from the generation preceding them – Gen X. Our fast facts show the vast differences:

• When it comes to banking, millennials are 2.5 times more likely than Baby Boomers and 1.5 times more likely than Gen Xers to switch banks, according to a Gallup poll. 
• 39% of millennials would consider using a branchless bank, compared with 16% for people age 55 and over reported by leadscon.

And this isn’t just an American trend. European banks are getting ahead by learning their core customers and taking action. Take a look:

• According to one EU report, the neobank customer base has grown by more than 15 million since 2011, while traditional retail banks have lost 2 million customers.
• This report also found that a quarter of bank branches have closed in Europe since 2008.
• Not surprisingly, this has lead to 51% of adult Europeans reporting that they use digital banking. 
• Digital banking is particularly popular among 25 to 34 year olds in Europe, with 68% using this facility.

Millennials Are the Digital Age

There are 7.7 billion millennials worldwide and they are a force to be reckoned with – and with so much technology already at their fingertips, banks will be forced to meet them online, on their mobile device, and over the cloud.

In a previous blog post, we discussed whether baby boomers find contacting their bank more or less fun than going to the dentist. Ironically, 71% of millennials reported that they would prefer visiting a dentist over listening to what a bank has to say. Yikes! While this statistic may be intimidating to banks and financial institutions, we actually think it gives them a launching pad for finding new ways to reach millennials, especially as the global trends for digital banking skyrocket. 

How Can Banks and Financial Institutions Reach Millennials? 

Brainstorming innovative ways to reach this prime audience is a good place to start. Digital and technological advancements have always been a part of millennial life, and in fact, they expect their banks to keep up with the trends. Here are some more fast facts that show just how digital and tech-savvy millennials are getting with their banking:  

• 47% of millennials use mobile banking, according to a global survey from Jumio and Javelin Strategy & Research, just over twice the number of Baby Boomers who bank via their mobile device. 
• An EU survey reported 86% of millennials use digital banking to make money transfers, balance checks, and perform general banking tasks.
• 43% of millennials don’t think their bank communicates with them through preferred channels, such as mobile apps and text messages.
• 47% of millennials have transferred money to someone electronically.

Before You Go Digital, Your Innovative Ideas Should Have a Strategy

While only 14% of millennials prefer to conduct banking activities in person, you can’t just throw together a digital solution and call it a day. You have to create a real strategy around innovation, otherwise you’ll see users jump ship. One survey found that 38% of millennials abandoned mobile banking activities when they took too long, and a Kasasa survey reported that 65% of American millennials said they'd be more open to switching to a community bank if it offered mobile services such as a mobile app or mobile check deposit.

With so many factors at play, digital banking, also known as neobanking, solutions are a trend that financial institutions should seriously consider if they are evaluating new ways to recruit millennials, but not without the proper strategy and implementation plan. 

If you’re ready to talk with a partner that has experience with digital transformation, innovation, or neobanking, contact Mobiquity today to start a conversation.