April 22, 2016
Millennials constitute more than a quarter of the US population. That is why companies across industries are turning their priority and attention to creating products which can cater to this significant group. In addition to extensive representation, millennials are expected to spend more than $60 billion on CPG in the next decade with a demand for mobile, social and personalized experiences when shopping. Moreover, according to a recent study, this group has influence over $600 billion of indirect spending, primarily because teens and young adults influence the purchasing habits of their parents.
Millennials are well-educated and financially savvy. They don’t get lured by marketing tricks easily and are eager to ask questions and learn. Millennials have an entrepreneurial spirit regardless of their background and believe that the real path to success lies in innovation. That may explain why there are so many young entrepreneurs behind successful startups.
Such a powerful group has a certain effect on the direction of the financial services industry’s development as they represent the future, the opportunities and all the benefits that come with them if leveraged intelligently.
Impatience, hunger for innovation and affection for smartphones among millennials has led startups to tune their business models to cater this special group. There is a range of FinTech startups across segments targeting millennials and building some of the most fascinating and convenient digital experiences in the market. As banks have realized the importance of mobile for this group, they started investing heavily into mobile banking to be able to compete with mobile-only challenger banks.
In order for banks and FinTech players to be successful in banking millennials, they need to understand the demands of this group. Media giant Facebook published a report earlier this year on the financial behavior of millennials that indicated an immense importance of mobile banking for millennials.
One of the important insights from the data analyzed by Facebook reflects that millennials are multichannel bankers. The ability to engage across any preferred and the most convenient channels to solve an immediate problem is extremely important to this part of the population.
However, it appears that across the means of communication and channels, mobile is of the highest priority and enjoys top preference. For millennials, smartphones have become the extension of their hands. In fact, mobile phones are such an important part of their lives that 77% of millennials have reported to always have their smartphone with them. Through mobile, millennials are reported to discuss and manage finances and connect visually.
Following the fact that mobile is everything for millennials, the report suggests that banks and businesses should put mobile experience at the center of their multichannel ecosystem. The statistics provided in the report speak in favor of mobile. According to Facebook data, 49% of millennials prefer banking through mobile.
Even though mobile is suggested to be at the center of the multichannel experience, it is not all that should be available. The word multichannel can be easily overlooked by those focusing too much on mobile. Regardless of the preference to do everything on mobile, millennials want to have a choice to walk into the branch. The bottom line here is that banks and businesses overall have to deliver a frictionless, multichannel experience wherever and whenever the clients want to connect. Data suggests that aside from almost half of millennials preferring mobile banking, 39% prefer walking into a branch, 9% like to bank on PCs and 6% want to be able to speak with someone on the phone.
But the task doesn’t end on just going mobile. Mobile loyalty requires significant effort to maintain, especially given the fierce competition of seamless experience providers. Facebook suggests that businesses should make it easier for people to manage, move and research money in addition to providing reasons to stay close on mobile.
Having a superior mobile experience is not everything there is to get to millennials. Personalization plays a vital role in building long-term mutually beneficial relationships with millennials. Financial institutions are encouraged to make experience across channels as personal and customizable as possible. Every touchpoint and every interaction has to speak to millennials and assure them that the bank knows them, gets them and can give them what they want.