78pc of millennials want mobile options when picking a bank: report
Banks and financial institutions looking to lure in millennials need to go beyond the basic requirements of mobile banking to also include personalized rewards and financial help, according to a new study from BancVue.
BancVue’s “Consumer Banking Insights” study looks at how millennials differ from older generations in terms of mobile banking. The results from roughly 1,000 United States adults aged 18 or older and indicate that while big banks are nailing some of the essentials with mobile banking, there is room for improvement with features that specifically target tech-savvy millennials.
“In almost all cases, banking apps allow you to bank, but not evaluate your broader financial goals if you have multiple accounts or debt holdings in other areas,” said Keith Brannan, chief marketing officer at BancVue, Austin, TX.
“A banking app is about banking, but the experience a millennial desires is often about their broader financial impact,” he said. “They want to know their bank or credit union understands them and they want products that allow them to engage on their terms.”
Bank on mobile
BancVue’s report breaks out three demographics: Millennials aged 18-34, 35-44 year olds and consumers aged 55 years or older.
Compared to the 78 percent of millennial consumers who look for mobile banking, 66 percent of 35-54 year olds and 44 percent of consumers aged 55 or older rate mobile as important when deciding on a bank.
These percentages shoot up even more when looking at online banking broadly. A whopping 94 percent of millennials said that online banking was important in choosing a financial institution compared to the 85 percent of consumers between the ages of 35 and 44.
Cash back options also resonate strongly with younger consumers. Eighty-eight percent of millennials were swayed by cash-back options from their bank versus 74 percent of mid-age consumers, and 67 percent of the older demographic.
Unsurprisingly, brand image is also more important to millennials than other generations when it comes to mobile banking. Eighty-one percent of millennials cited recognizable brand name as at least somewhat important compared to the group of consumers aged 35-54 years old.
Millennials also expect for their mobile experiences with banks to be personalized and customized.
Eighty-six percent of Gen-Y consumers surveyed also said that customizable rewards were important to them, which is up from the 73 percent of mid-aged group who said the same. Sixty-seven percent of older consumers said that personalized deals were important to them.
Across all age groups, 28 percent of megabank — or a major bank — clients rated mobile banking as important. This is up significantly from the 15 percent of consumers with a bank account from a community financial institution — or CFI — who said the same.
ATM access was rated as important by 84 percent of megabank consumers compared to 67 percent of CFI bankers.
The study backs up the fact that while big financial brands have been quick to embrace mobile to keep up with consumers’ growing expectations, the shift from physical to digital banking has been slower for credit unions and smaller banks.
As millennials increasingly become more financially independent, smaller banks will need to step up their mobile initiatives significantly to stay relevant to this group.
Twenty-three percent of Gen-Y consumers who have a checking account outside of a CFI believe that CFIs do not offer the same benefits that they already receive.
According to Mr. Brannan, financial companies could take a lesson from Amazon on how to better serve millennial mobile bankers. Amazon’s live support help on its Kindle Fire tablets connects consumers directly to help, which matches up with millennials’ expectations to immediately connect with brands whenever they want.
“In the past, younger consumers have typically followed their parent’s guidance in opening their first bank account,” Mr. Brannan said.
“These days, a lot is shifting, and millennials tend to follow advice of new groups outside of parents,” he said. “Going forward, we see banks making it easier and easier for consumers to go from assessment to account opening immediately.”
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York