Author: Barbara Vega, BVega@profitstars.com
If you remember a time before cable TV and microwaves, you’re not a millennial. If you remember a time before computers and cell phones, you’re not a millennial. If you remember a time when there was no ‘e’ before mail, you’re definitely not a millennial.
Millennials, or Gen Y’s, are those born between 1982 and 1993 and a generation that’s roughly 77 million strong; larger than the Baby Boomer generation and three times the size of Generation X. Generations, like people, have personalities. Millennials –teens and twenty-something’s currently making the passage into adulthood – have begun to build theirs: confident, self-expressive, liberal, upbeat and receptive to new ideas and ways of living. And this generation is wired…or should I say wireless.
Today’s kids are tomorrow’s customers and members. If your financial institution is going to flourish in the future, you need to start courting the next generation of money-makers now. And be warned: these young consumers have very different financial habits than their parents! So what to do?
Ironically, we have a high-tech group of individuals that are very social, but in impersonal ways. These young people are very connected virtually; texting, tweeting, FaceBooking, Instagramming is the way to communicate.
This digitally endemic group has pushed back each of the five milestones of adulthood: completing school, leaving home, becoming financially independent, marrying and having children. The Pew Research Center’s survey, Young, Underemployed and Optimistic, gives us a great insight into Gen Y’s situation. The report showed, among other things, that 34% of 25-29 year olds have moved back home with their parents.
Access them through the technology and mobile arena
Connect with them where they exist! Millennials have grown up in a world where they are surrounded by technology, and that technology has developed at a faster rate than ever before.
A Cisco Connected Worldwide Technology survey discovered that 90% of Gen Y checks their emails, texts and social media accounts using their smartphones before they even get out of bed. There is also evidence that millennials do everything online, from shopping, to reading the news and watching television. Convenience and immediacy are priorities for this group of individuals, especially when it comes to banking. A LemonTree white paper, Understanding the New Age Wave: Gen Y, found 80% have used online banking in the past month, a higher percentage than any other generation. “They are less likely to ever enter a bank branch and want to do all their banking on their own schedule from home. Because of this, mobile banking has also taken off for Gen Y.” They also use this service more frequently than the average customer.
Gen Y consumers don’t necessarily want high tech solutions in isolation; just as important, they want support, advice, and more knowledgeable people speaking to them than they currently experience in their banking interactions. A large number of Gen Y consumers have never balanced a checkbook, but instead they monitor their accounts online to manage their finances; and 25 percent say they do not manage their finances at all.
Fifty-four percent of millennials are going into their bank branch for information; 62 percent are going online. While 59 percent reported that they are "extremely" or "very" knowledgeable about their day-to-day banking products like checking accounts, they still want advice on personal finance topics, including savings, creating a budget, and credit cards.
Unify your product landscape – make it easy and clear
A dedicated strategy is needed when engaging Gen Y. As millennials are different from other customers, roughly one third of financial institutions have designed specific strategies to win them over. Millennials are desperate for a better banking experience; one with lower, more transparent fees, convenient access and emergency credit options. Use of social media for marketing and reaching out to their customers to launch new products, make announcements and drive new conversations with their customers is becoming common place as a way to get the attention of this generation.
Focus on customer service consistency
One of the cornerstones of the Gen Y engagement is a great banking experience. Enhancing the customer experience is the key to attracting millennial customers. As payment behavior changes, and traditional bank customers give way to a younger generation, the relationship between a customer and its bank will help secure that banks are relevant. If banks want to serve these customers profitably, they will need to leverage that relationship and find new ways of doing business with them.
Remember - today’s kids are tomorrow’s customers and members. As baby boomers retire, the millennials will move into their roles. With increases in job responsibility will come increased purchasing power. As this large group ages, they will begin hitting their big earning years and focus more on retirement and investing.
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