Millennials are entering the wealth-accumulation phase of their lives and are driving all major banking trends. A new CSI and The Center for Generational Kinetics research report provides insight into these new millennial banking preferences and behaviors and what millennials now need and want from a bank or credit union.
Most consumers, particularly millennials, carry their bank around in their purse or pocket. Financial transactions are now easier, instant and continuous. Let’s look at what’s driving the habits of these new bank customers.
Millennial banking habits
The CSI/CGK report identifies several key millennial habits worth noting:
- 31% check their account balance daily
- 51% prefer to check their balance within their bank’s mobile app
- 39% like to transfer funds using their bank’s mobile app
Obviously, banks need to have a first-class, user-friendly, fun and engaging mobile app.
Using apps to get things done
Millennials love using apps to get things done such as sharing music, paying bills, watching videos, etc. Here are some more technology use insights:
- 60% will go more than a year without writing a check (vs 40% of Boomers)
- 84% say they will use a money transfer app or service such as PayPal or Venmo if available.
Rewards move the needle
These consumers already trust and use online banking services frequently. The report says, “Nearly half of Boomers and Gen Xers say that added protection would absolutely encourage them to use their bank’s online services more often.”
But it’s rewards that are the number one thing that will get millennials to use their banking more.
“46% of Millennials say they would absolutely use their bank’s online services more often if the bank or credit union had a rewards program for usage.”
A balance of convenience & trust
Ironically for millennials, digital communication isn’t everything. 41% of all bank customers say face-to-face is their preferred method of communication with their bank. 25% say the telephone is their preferred way to interact.
The upshot, banks need to offer multichannel communication channels to customers. “Top-notch, interpersonal customer service should not be sacrificed in the digital age,” the report says.
Millennials prefer financial advice from people
While millennials trust technology and live very much in a digital world, research found that they still prefer to get financial advice from people, especially professionals.
- 67% trust the advice given by certified or professional financial advisors
- 53% trust financial advice from a family member, and half of Millennials trust the advice given by a staff member at their bank.
The report suggests “Offering financial tips or classes taught by a staff member or other knowledgeable professional is an opportunity to deeply engage Millennials in a way they trust and prefer.”
Security concerns all generations
Security concerns are the downside of online banking. Despite their digital savvy,
- 44% of millennials say security concerns are the main disadvantage of online banking
- 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 bank or credit union’s website or mobile app more frequently
- more than 30 million bank customers say that the fear of bank, credit card or identity theft has kept them from opening an account at a new bank or credit union.
Financial institutions can move the needle on customers use by “messaging that articulates their security practices and leveraging new security protocols, like tokenization and out-of-wallet authentication, in online channels,” according to the report.
How to win millennial bank customers
The CSI/CGK report concludes with some valuable recommendations on how to adjust services to win and engage with millennial bank customers:
“From an expectation of exceptional digital and human interactions to an enthusiastic response to rewards, Millennials are creating a new norm in banking. However, when it comes to security issues, generational divisions all but disappear. Banking customers of all ages express concern about the security of their personal data, sometimes even forgoing opening new accounts as a result. Meanwhile, bank customers will also increase their usage of digital tools when a bank or credit union increases its security and fraud protection on those platforms.”
Financial institutions, and for that matter other online and e-commerce businesses targeting millennials, can win with top-notch mobile experiences. They must make use of attractive rewards and discounts and recognize that security concerns are a red alert.
You can get free access to the full report “Banking Trends Through a Millennial Lens“ and its valuable insights and recommendations here.
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