As Millennials begin to financially establish themselves and seek additional banking products over time, their banks have to be willing to adapt with them and remain relevant in their services and delivery. They're looking for a financial-service provider that understands their needs, has products that fit their circumstances and offers tools that allow them to conveniently manage their finances independently.
Here are five things to know about millennials and mobile banking:
1. Their banks need to be more digital than physical.
The bank branch hasn’t gone away, though much of a millennial’s banking is now done digitally, with 80% of them banking online or through mobile channels (FICO, 2015). As millennials are moving more of their primary banking activities to online and mobile channels, banks are charged with providing tools that can seamlessly blend the brand experience across retail and digital.
2. A top-notch mobile banking experience isn’t an experiment. It’s an investment.
As banks design mobile experiences to enhance ease of use and provide tools that can be used in the moment, the millennial use case is too big to be de-prioritized. In the past month, 77% of millennials used mobile banking, compared to 46% of 36- to 55-year-olds, and just 29% of adults over 56 (Kantar). While online and mobile banking are table stakes for national bank brands, it’s critically important to design a mobile banking experience for their most active and engaged users, even if they’re years away from becoming the most profitable bank customers.
3. Expecting more than “a pretty good bank app.”
Widely hailed as members of the most mobile generation, millennials spend more time on their phones than any other age group. In fact, their mobile usage accounts for 41% of total time spent on mobile devices, while they represent only 29% of the population (Experian, 2014). However, just because millennials live on their phones doesn’t mean that they’ll engage with any brand with an app. In this area, bank brands have a lot to overcome. According to Viacom, 73% of millennials would be more excited about a new financial-services offering from Google, Apple, Amazon, PayPal or Square than from their own nationwide bank (Viacom, 2014), suggesting that the best-in-class user experience is expected by the audience to come from outside of the category.
4. Millennials are looking to mobile brands to fill financial gaps once filled by banks.
As millennials rely more on the digital offerings of their financial institutions than the physical (e.g., branches, checks and bankers), they become much more open to filling in the service gaps with other mobile services. Specifically, the rise of P2P payment through apps like Venmo and PayPal, and brand extensions from Facebook, Snapchat and Square, have captured the attention of millennials and the emulation of banks trying to keep up in the mobile-innovation space. Currently, over half of millennials are already using or would consider using PayPal or Venmo to send money. Rounding out the nontraditional-banking trend, P2P lending poses a serious threat to financial institutions that are unable to provide the credit to consumers and small businesses that they have historically relied on banks to provide (FICO, 2015).
5. Mobile banking isn’t central to their lives, but it should work for them when and where they need it.
Even well-intentioned brands are often guilty of unintentionally introducing complexity into their consumers’ lives with tools that complicate an experience more than they simplify it. In the landgrab for mobile utility, these brands will bolt on tools to their apps that can support a variety of use cases. Though in doing so, they’ll create an unfocused catch-all experience that is often difficult for consumers to navigate. Bank brands need to apply discipline and a clear vision of their users’ needs when creating a simple, fast and intuitive mobile banking experience. When it comes down to it, the greatest value a bank can provide to millennials through its mobile app is to minimize the friction between how they live and how the bank operates.
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