How to Attract and Keep Millennials at Your Financial Institution

Millennials are the largest adult generation in the country, significantly impacting the economy. With a population of over 2 billion and spending power exceeding $200 billion, it’s crucial for financial institutions to consider millennial banking habits in their marketing strategies. However, Everfi, a financial education firm, notes that banks often overlook these habits.

Your financial institution can’t afford to ignore this substantial group. Many millennials are starting new jobs, buying their first homes, and reaching other financial milestones. According to a 2019 Morgan Stanley study, millennials could become the largest borrowers in the next decade.

Here are four tips to help you attract and retain millennial customers:

1. Enhance your digital banking options.

2. Boost your social media presence.

3. Build their loyalty.

4. Exceed their expectations.

Let’s explore these tips in detail.

Tip #1: Enhance Your Digital Banking Options

Millennials have grown up with technology at their fingertips. If your financial institution’s digital services lag behind, you’ll struggle to attract them. Over 80% of millennials own smartphones, and this number might be even higher. Despite the importance of smartphones to millennials, many financial institutions miss the opportunity to meet their digital needs. About 67% of millennials feel their banks don’t provide the digital experience they want.

Millennials want easy and comprehensive digital banking, whether on a computer or mobile device. Most prefer digital interactions over talking to someone at a bank. If your digital services aren’t up to standard, millennials will switch to banks that offer better electronic services, often large national banks.

Your website and mobile banking app should meet their needs, allowing customers to handle many aspects of their transactions, including:

– Check-scan deposits

– Loan rates and applications

– Electronic payments

– Real-time information and updates

– Alerts and notifications

– Strong security

To attract millennials, your digital services must be as good as or better than your competitors. Research what other banks offer online and on mobile devices, and ensure your offerings are competitive. Investing in your digital options will pay off with millennial customers.

Tip #2: Boost Your Social Media Presence

Estimates vary on how much time millennials spend on social media, but the National Retail Federation cites an average of 3.8 hours a day. This group also likes to interact with businesses through social media. According to Lorman, 52% of millennial customers have used social media to ask their bank a customer service question.

To engage millennials, make sure your social media posts are helpful and address their concerns. If you don’t show you understand their needs, they’ll go elsewhere. Many millennials face financial challenges like high student loans, a volatile economy, and uncertainty about long-term borrowing. They need advice on financial management for life goals. Use your social media to address these needs.

For example, you can offer:

– A guide for first-time investors

– A step-by-step student loan repayment plan for recent graduates

– Information on buying a new home for newlyweds

Millennials lead fast-paced lives and expect quick responses on social media. Staff members should regularly check for and respond to questions. If you don’t, your competitors who do will win their business.

Although your past approach to financial services may have worked with older generations, you need to adapt. Stay current with social media trends. Millennials prefer different platforms than older generations. By 2022, TikTok is expected to surpass other platforms for social media marketing, especially among millennials and younger audiences.

Tip #3: Build Their Loyalty

While technology is essential, don’t forget the personal touch. Many millennials distrust institutions and are quick to switch banks if they’re dissatisfied. They change their primary bank about 2.5 times more often than baby boomers or traditionalists.

According to the ABA, earning millennials’ trust requires personalized experiences along with seamless technology. Younger customers value and reward brands that offer a personalized touch.

For financial institutions, a personalized experience includes offering choices. While millennials demand excellent digital services, they also sometimes want to interact with employees. Two-thirds of millennials visited a bank branch in the past six months. Whenever they interact with your staff, they expect top-notch customer service.

Ensure your customer service is quick, easy, and genuinely helpful. If customers have to repeat information multiple times to get help, you’ll lose millennials. They won’t tolerate inefficient service. Millennials are four times more likely to leave their current bank after a high-effort experience.

Tip #4: Exceed Their Expectations

Millennials have high expectations, and many financial institutions are ready to meet them. To compete, make sure you meet or exceed their expectations.

Here are some suggestions:

– Help them track their spending. Alert them to overspending or potential financial trouble. One millennial quoted in Deloitte research mentioned that a tool to understand spending habits and help with savings goals would be highly valuable and trustworthy.

– Forgive fees when possible. For example, waive a late fee for a good customer if it’s a one-time occurrence. Empower customer service agents to forgive some fees.

– Offer perks and rewards, such as interest on checking accounts and cash-back credit cards. Deloitte found that millennials look for incentives when choosing a financial institution. One millennial mentioned that a credit card saving them 5% was a significant factor in their choice.

If millennials see your institution as just another bank wanting their money, why should they choose you? They want more—more options, perks, and help. If you don’t provide this, they’ll find someone who will.

Deloitte quotes one millennial’s frustration with her bank’s routine approach: “My bank is not really helping me because they’re just holding my money. They’re not helping me reach my goal. There’s nothing really helpful they’re doing to help me earn additional money.”

Conclusion

Online banks and Fintech are attractive and convenient. Millennials expect high-tech options but also need guidance to make smart financial decisions. Local, traditional financial institutions can offer this guidance and personal touch, giving you an edge. Make it count.

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