Smartphone — the future of a bank is in our pockets. As Bill Gates famously said, “People don’t need banks; they need banking” – and that could never be more true. Millennials no longer require traditional brick-and-mortar banks and are looking for new banking options. According to a Gallup poll, “Millennials are 2.5x more likely to switch banks than Baby Boomers (3.6%) or traditionalists (3.3%) and 1.5x more often than Gen Xers (5.5%).”
They want to do everything on their smartphones and want to do things seamlessly without interacting with people. They book ride-hailing services, order food, shop online, so why should banking be any different? With that said, let’s uncover the banking habits of Millennial customers.
Millennials are 2.5x more likely to switch banks than Baby Boomers (3.6%) or traditionalists (3.3%) and 1.5x more often than Gen Xers (5.5%).
Smartphones Replacing Banks
For Millennials, starting any relationship with a bank is as simple as downloading an app. The mobile device and the experience they have in the app will determine whether that relationship will grow or end. Mobiles have become the lead between our physical and digital worlds – it is a wallet as much as it is a communication device.
They may be the first generation leading their lives without any interactions with traditional banks. According to Javelin Strategy & Research and Jumio, 47% of millennials use mobile banking. Smartphones have become life’s remote control. It is imperative for banks to digitally transform to compete against data-intensive, platform-based business models and Millennials have become a lead indicator to disruption in financial services.
Convenient, Speedy, Efficient
Millennials are speed demons. They are used to efficiencies in life; and frustrations of dealing with a big, faceless, nameless bank puts them off. They are the first digital natives growing up with technology, they have grown up using laptops, smartphones and are very comfortable with this technology.
Research has shown that Millennials are brand loyal; and happen to be loyal to convenience as well. They are addicted to their smartphones and want services to be delivered wherever they are and whenever they need them. They favour convenience and a good user experience, even sometimes at the detriment of security. They are comfortable interacting with banks online and on their smartphones rather than walking into a branch. Millennials have embraced a “do-for-me” culture and expect technologies to simplify their lives.
A Cashless Society
Millennials prefer convenience over safety and are resistant to anything that detracts them from the overall user experience. When they perform transactions through a digital channel, the balance of power shifts and they now have power. The role that big banks have played forever and everyone thought they had a certain future simple does not hold anymore. They have to think differently. Client expectations are rising everyday and it is not because of what big banks are doing. Fitbit, ride-hailing apps, companies that have nothing to do with banking but have everything to do with setting client expectations.
Millennials Have High Expectations as Customers
Millennials prefer convenience over safety and are resistant to anything that detracts them from the overall user experience. When they perform transactions through a digital channel, the balance of power shifts and they now have power. The role that big banks have played forever and everyone thought they had a certain future simple does not hold anymore. They have to think differently. Client expectations are rising everyday and it is not because of what big banks are doing. Fitbit, ride-hailing apps, companies that have nothing to do with banking but have everything to do with setting client expectations.
What’s Next For Banking?
Millennials possess more than one electronic device – they have their smartphones, laptops, tablets and it is important for banks to have a strong portfolio of seamless digital offerings to appeal to this demographic.
To be a make a one-stop financial resource for Millennials, it is critical for banks to understand the banking habits of Millennial customers and strive to implement user-friendly and low-friction services.
