Millennials Are the Fastest Growing Customer Base.
Millennials are the fastest growing customer base. Their number, education, and exposure make them a target for businesses who are looking to woo clients. The story is no different in the banking industry where financial institutions consider them an asset that must be had.
Think about it; it has been predicted that millennials will represent about 75 percent of the global workforce by 2025, per Bankingly.com. Millennials also make up a more significant portion of the labor market. They may not be as wealthy as the boomers, but more workforce means more money at their disposal to contribute towards bank deposits. The millennials have it all, it seems. So it makes sense that they are a target for anyone who is looking to generate customers.
However, this generation tends to have different expectations from boomers when it comes to the financial services sector.
Understanding their Reasons and Preferences
It is no secret that consumer taste changes with each passing generation. For millennials, this means a preference for online banking over more traditional financial institutions. After all, they are a generation who practically live on their smartphones. Millennials are tech-savvy and consider their phones the new wallet because they expect digital convenience in all aspects of their lives.
The Bankingly report claims that 71% of millennials would rather go to the dentist than go to the bank. Also, around 33% of millennials are of the opinion that they do not need a bank. A further 53 percent of them believe that their banks offer the same products as any other.
This makes millennials more open to switching banks since they don’t see any differences between these financial institutions. Instead of sticking with brick-and-mortar banks, millennials prefer mobile banking. Baby boomers, on the other hand, prefer to stick with older banks due to concerns over the safety of their financial data. Such diverging attitudes create a huge problem for financial institutions.
With the boomers retiring, millennials are expected to fuel future growth for the banking industry through loans, mortgages, retirement accounts, etc. Nonetheless, it appears that banking needs of millennials are influenced by their lifestyles. And this creates uncertainty regarding what the future holds for older banks.
Two Main Reasons Millennials
- The global financial crisis: The global financial crisis has made millennials skeptical of banks. The 2007 global financial crisis made it hard for older millennials who came of age at that time to secure jobs and pay off student loans. Also, they are educated enough to know that the global financial crisis was due to the greed and fraud that pervaded the banking industry at the time.
- Millennials expect digital convenience: As mentioned earlier, millennials demand digital services because they seek convenience. The American Bankers Association reports that millennials are three times more likely to open a new account with their phone than in person. This causes them to lean more towards banks that offer digital services than the more traditional ones.
Millenials Are Distrustful of the Traditional Banking System World Wide. They Expect The Digital Convenience , Faster Service From Mobile Apps and Tablets For Their Banking Needs