Banks know that their future growth depends on millennials, a group who over 34% feel dejected about their current and future financial situation. This financially fragile generation is turning away from traditional banking players as they search for easy to use and personalised financial services. This shift in consumer preference is worrying for innovation-averse banks which need to adapt their service offering to appeal to this modern and selective group.
In order to best serve millennials, banks need to firstly understand what it is that they want from their banking provider.
Millennials want simplicity.
Millennials look for convenient banking apps that are simple to use. 62% of Australian millennials decide which new bank to sign-up to based on the ease of use of the accompanying mobile app.
Millennials require flexibility.
Millennials are taking a flexible approach to banking. They want the freedom to control their finances and will often integrate new digital banking services in addition to their primary bank in order to achieve this. 61% of 18 to 34-year-olds in the United States have adopted new digital banking services alongside their traditional bank. In other geographies this number gets higher; 70% in Germany and 74% in Australia.
Millennials have their own channels.
Traditional channels don’t have the same appeal to millennials as they may have had to other generations. Millennials want to interact with providers on platforms that are already a part of their day-to-day, such as messaging apps. 97% of Australian millennials say they’re comfortable interacting with a bank on a messaging app, the same is true in the UK (92%) and in Germany (91%).
Millennials trust banks which understand them.
Millennials have higher levels of trust in banks if they feel understood by their financial provider. In the US 67% of millennials trust a bank which understands them. Similarly, 61% of millennials in Germany, 60% in Australia and 55% in the UK feel the same.
So how do banks and traditional providers connect with millennials and provide them with the financial service offering they are looking for?
Focus on user experience.
Banks need to deliver customer-centric applications that simplify the online banking experience and engage customers whenever they are logged-in. By offering speedy app load times, clear overview of current finances and additional app capabilities such as financial literacy tips, banks can make banking simpler and easier to comprehend. Below, you can see an example of user-friendly, personalised financial literacy tips that are powered by Moneythor’s software.
Banks can become a foundation on which users can add and build onto in order to achieve their desired financial platform. Banks and other traditional players need to offer users freedom and control over their finances by giving them the tools to build their desired financial system.
This can be a big investment of both time and money for banks but can be made simpler by partnering with external FinTech companies who may have already dedicated the time and resources to creating the functionality millennials are after.
Be where millennials are.
Banks need to integrate messaging apps into their communication strategies in order to stay relevant amongst this phone-call-allergic group. Conversational user interfaces such as chatbots are making messaging apps a cost-effective way to talk to consumers and provide a more efficient service.
Show you understand.
There is an opportunity for banks to build trust amongst millennials by offering a more personalised banking experience. By offering personal financial management (PFM) tools, financial literacy materials, and relevant offers, financial providers can build a more peronalised and authentic relationship with their consumer base and show millennials that their financial situation is understood.
In summary, millennials expect a lot from their banks and other financial services providers, meaning that traditional players and new entrants alike need to focus on flexibility, ease of use and personalisation in order to provide the exceptional customer experience this generation are after.
Moneythor develops software providing more intelligent and contextual digital banking for customers and enhanced marketing and analytics for financial institutions. The Moneythor solution comes as an easy-to-implement set of software components delivered as APIs enabling banks and fintech firms to offer improved functionality and experience to their retail & business customers through their digital banking services. The Moneythor solution has been deployed by large international banks such as ANZ, CIMB, Credit Mutuel Arkea, DBS Bank and Standard Chartered, fintech firms such as Raiz as well as digital banks such as Orange Bank among others. Get in touch.