16 June 2016
Banking Changes to Serve Millennials

Hold on, Boomers. Millennials – loosely defined as kids born between 1982 and 2004 – now account for a larger market segment than Boomers, and the kids who grew up watching Howdy Doody are moving into age-restricted communities in warm climates.

The Millennial generation was the first to grow up with computers and with 24/7 access to the Internet, and this enormous population bubble will change the way people bank and the way banks attract new clients. Only about 38% of millennials use physical banks to perform banking activities, other than using an ATM.* This generation isn’t scouring the Internet for the best terms or lowest fees. Their motivations are different. Make it quick, easy, 24/7, and online. Forget the free toaster.

Micah Phillips, marketing director at Nevada State Bank, said, “Millennials’ expectations aren’t shaped just by what banks are doing, but by the relationships they have with other retail service providers. They can shop online from their smartphone, using quick and easy programs. People are becoming used to doing business that way, and they expect their banking relationship to follow suit.”

So, what do Millennials want from their bank?

Millennials want to do it online – not all the way downtown. A long menu of online services with 100% uptime is a must. Most Millennials want to do it all online – transfer money between accounts, check account balances, set up automatic payments, pay their mortgage, and accept auto-payroll deposits. They like automating routine tasks like bill paying to eliminate those nasty late payments.

Millennials love the Internet. Heads down, eyes glued to a screen, surrounded by some mysterious force field that prevents them from walking into lamp posts, these tech-savvy people think nothing of posting dinner pix on the run, using a smartphone or pad – they’ll even use a laptop if that’s all that’s available.

Millennials want ease of use. As kids, we had to trudge 30 feet to get to the Atari console. Times were tough back in the 90s, and RAM was expensive. Today’s smartphone, PDA or tablet can download an app to display GPS coordinates or the shopping list when you head to the market.

They value speed and convenience. Whether it’s a smartphone, online banking, or easy access to bank accounts using the security-ware-loaded desktop at home, Millennials don’t like to be kept waiting. They want a bank that’s accessible, so they can bank how and when they want. They want to log on at 1:00 AM to balance the business ledger over a bowl of cereal – their terms, not bank terms. Their schedule, not the usual 9:00 to 4:00 routine.

Millennial business owners bank differently than previous generations. This generation wants smart tech solutions. They expect banks to offer digital access, using secure technology and a variety of access options. They want to complete as much banking as possible online, and to automate it rather than performing routine tasks manually. They want to capture payments from customers remotely, using a smartphone or tablet. No postage, no “net 30.” They expect payment when services or products are delivered, improving cash flow. Remote Deposit technology allows them to transmit images of checks to their bank rather than making a trip to the branch. The money’s in the company account faster, and at much lower costs than traditional billing and collections.

Banks respond by going mobile. One of the ways banks have been changing to accommodate Millennials’ demands is to make more bank services accessible by mobile devices. Nevada State Bank offers mobile banking and bill pay to both consumer and business clients, and is constantly updating products as new technology becomes available. Phillips, said, “You have to keep moving, because technology is constantly changing. I think that’s an expectation that Millennials have. They assume we’re going to deliver that service, and if we don’t, it could influence whether they choose to bank with us or not.”

Tomorrow’s customers will expect more services, increased automation, and simplicity of use. When a population segment, bigger than the Boomers, expects it, the bank that delivers the best services through the most portals, with the best encryption security available, at the lowest price, will win.

*http://www.businessinsider.com/millennials-banking-habits-suggest-deeper-branch-cuts-are-coming-2015-10

 

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.

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