Tipping the scales: How to attract millennials to your bank
What is a baby boomer's preferred method of banking? How about Gen X? Millennials?
The fact of the matter is that generations bank differently. A baby boomer may prefer to speak to a teller at a brick-and-mortar branch, while a millennial is perfectly happy completing that transaction on his or her smartphone. Your bank may be fine taking a broad approach to marketing for each demographic, but this could put you in a tough spot in the future.
Millennials are younger; millennials are now one of the largest generations - and your bank should reflect the changing tide present across the U.S. Do you want to tip the scales in your favor? Then customize your bank to attract more millennials.
Millennials are wary of banks
First, you'll need to understand the obstacles you can face when marketing toward millennials. Back in early 2014, Scratch - a division of Viacom - released the results of its three-year-long survey of the millennial generation's impact on industries, and found that the greatest disruption was likely to hit banks.
Called the "Millennial Disruption Index," Scratch reported that the financial services industry is in a position to be significantly transformed by millennials in the near future. Of the millennials polled over the three-year period, 53 percent believe that their banks aren't special compared to other banks. In addition, 71 percent would rather go to a dentist than heed advice from their bank.
Larger banks are at a disadvantage, as well. Scratch noted that four of millennials' least loved brands are top banks in the U.S. Millennials are also comfortable moving ahead without banking services, with 33 percent saying that they won't need a bank at all. Furthermore, 68 percent expect to access money in a completely different fashion over the next five years.
Let technology help you improve your bank
Thankfully, financial institutions have plenty of options to overcome these hurdles and attract more millennials. To begin, you should take a holistic approach - customize your bank to appeal to Gen Y, Gen X and boomers, all in one.
You can do that through technology. For example, boomers can have a streamlined teller experience thanks to cash recyclers, the universal banker model and similar changes. Millennials can be happier if you offer a wide range of online banking and mobile applications.
According to an excerpt of a BBVA research paper on millennials, shared via The Financial Brand, a large portion of millennials are hooked on technology. This can be beneficial for a couple of reasons:
- Offer tech-based banking solutions - You can implement tech-based banking tools to attract millennials. You could have a mobile application, or you can offer online bill pay and other similar features. While many banks already do this, you can set yourself apart by focusing on usability, customization and functionality.
- Improve your brand image - Thanks to millennials' ties to technology, you can use the Internet to your advantage when branding. Consider creating social media profiles for your company. Here, you can interact with millennials and improve your image. However, this can be a double-edged sword. Many companies notoriously slip up on social media. Plus, any mistake can be shared with millions in mere moments online.
Address your view of millennials
In many cases, financial institutions overlook the value of millennials as viable customers. Gen Y has too much student loan debt, they are too young, or they don't have enough money - these are common objections often heard throughout the financial services industry.
"You can improve your bank if you tailor your marketing for millennials."
That doesn't have to be the case for your bank. In an article for American Banker, Jackie Stewart explained mid- and small-sized banks have an edge on their larger competitors. They can adapt quicker, and they can offer more unique features that attract millennials.
Joe Sullivan, chief executive officer of the consulting firm Market Insights, told Stewart that the negative attitude banks have toward millennials can be a problem. Gen Y may not be a premier customer right now, but in a few years they could be buying a car or buying a house - and they tend to have long-term brand loyalty. If you cater to them now, they'll be more likely to stick with your bank when they are more profitable.
Most importantly, make sure your company understands the value of the millennial generation. You can surge past your competitors with a comprehensive focus on all demographics, especially Gen Y.