Having grown up in a constantly evolving consumer culture, millennials are often referred to as digital and mobile natives. However, online banking is one territory where they don’t feel as savvy. Most young adults learned banking habits from their parents when there was a much more formal relationship between a banker and their customers. Now, in a digital age, banking has gone the way of most formerly traditional services and embraced digital and mobile mindsets.
According to Mark Ranta, Senior Solutions Consultant of Digital Channels at ACI Worldwide, “The life milestones where young adults typically picked up more complex financial relationships (marriage, starting a family, buying a home, etc.) are happening out of order, so millennials are turning towards more mobile and digital banking solutions – because that’s what we know best.”
Millennials are an extremely digitally driven generation and are very skeptical of major financial brands. Remember, this is a generation that saw what happened to their parents when the market crashed in 2008. These young adults like to keep their finances right where they can see them, in their pocket.
“If you take a look at my phone, you’ll see that I’ve basically created my own bank,” said Ranta. “I have a folder with my bank apps, my wealth management apps and my money transfer apps. This is the millennial way – creating a banking ecosystem that is available instantly.”
Mint is a great example of a brand that has adapted to the growing necessity for digital wealth management systems. The website functions as a hub where millennials can import their budgets (or build customized budgets), monitor their credit, and schedule bill payments from any of their financial accounts. The ease at which a millennial consumer is able to use the site and their ability to login from their computers, tablets or phones makes it a win with millennials.
The goal of the site is to empower the consumer to make informed financial decisions because they are able see an accurate picture of their financial standing in one place. This transparency is something that millennials value because they can see how their spending choices influence their personal wealth and adjust accordingly.
Banks Standing for More Than Their Bottom Lines
So beyond just embracing mobile banking solutions, how else have banks adapted to changing consumer perceptions of financial management? Banks are now transitioning into an advisor, acting as a guide for young adults and helping young adults through their financial decisions.
Fifth Third Bank recently created a new campaign that will connect with recent millennial graduates and provide them with one-on-one job search training. The goal of the campaign is to extend beyond just the traditional bank relationship.
“We refer to ourselves as the curious bank,” said Larry Magnesen, SVP and Director of Communications at Fifth Third Bank. “Beyond just the financial space, we were curious about how we could help our community. We realized that there was a whole population of younger consumers who were still developing their financial habits while they were struggling with unemployment.”
The Brand of You Campaign is a win with millennials because it goes beyond the standard and often poorly perceived banking relationships of the past. Among millennials, there is a very common perception that the financial industry is riddled with scams and mismanagement. When banks make a point to show that they are genuinely interested in the well being of their customers, they will see higher customer satisfaction rates among millennials.
With graduation season wrapping up, an estimated 2.8 million graduates are getting ready to enter the work force and will be financially independent for the first time. Research shows that by 2020 millennials will be an estimated 46 percent of all U.S. workers and with America’s unemployment rates the lowest they have been in years, you would think this is the time to celebrate, right? Don’t pop the champagne just yet.
Currently, millennials still make up 40 percent of the unemployed population in the U.S today. Higher tuition rates, less financial aid and more need to take out student loans are already setting millennials up on a path towards high debt the moment they receive their diplomas.
For these young adults, the financial pressure can be debilitating. With this tension building, millennials are looking to banks and other wealth management platforms to help organize their finances in a way that makes sense to them through their digital channels and help set them on the right path towards financial stability and successful futures.