To get Millennials to sign up with a bank, it takes more than low interest fees and longer branch hours to convince them to come – banks also need to be savvy about the way Millennials want to do their banking.
And for many in the generation born between the 1980s and the mid-nineties, it seems they want to use their smartphones and tablets to deposit cheques, view their balances, and keep track of their finances.
In a new report from FICO, a big data analytics software provider focused on the financial services industry, researchers polled about 900 Millennials living in the U.S., between ages 25 to 34.
They found about 70 per cent of them use mobile banking apps – and among this group, 83 per cent of them said they were satisfied with what the app had to offer. Among those who used their bank’s app, 78 per cent of them were likely to recommend that bank to their circles, compared to 67 per cent of respondents who do not use their bank’s official app.
And when it comes to communicating with Millennials, they also have certain expectations on how their banks will reach out to them. Compared to bank customers over 50, Millennials are three times as likely to prefer getting text notifications for information like their account balance updates, their bill payment reminders, and their credit limit warnings. They’re also 2.5 times as likely to want a text telling them they’re late to make a payment, and twice as likely to want to be notified of a suspicious charge via text message.
Accommodating Millennials’ wants is pretty important to ensure they stay loyal to their current bank. Compared to consumers over age 50, Millennials are five times more likely to close all their accounts with their primary bank, according to the FICO report. However, when Millennials do find a banking experience they enjoy, they will recommend their banks – 56 per cent of respondents said they had recommended a bank in the past, compared to 44 per cent who hadn’t.
Still, none of this is to say Millennials don’t care about other aspects of their banking experience. About 34 per cent of respondents said they left a bank because they found the account fees were too high, and another 27 per cent took their banking elsewhere because a bank representative gave them a negative experience. Plus, until digital cash becomes more commonplace, millennials still need ATMs. Twenty-four per cent said they left their bank because there weren’t enough ATM locations nearby.
Tracking how Millennials want to manage their finances matters, FICO’s researchers said in their report. They noted Millennials now make up the largest population segment in the U.S., making them increasingly important as baby boomers continue to age – so banks, and even other companies, may want to follow what this demographic is up to.
For the full report, head on over here.