Millennials, also known as Generation Y, and their younger Gen Z cohort demand flexibility and personalization when it comes to online banking options. In the U.S. population in 2020, millennials accounted for 21.93% and Gen Z comprised 20.35%. These are critical generations to reach.
With digital banking, customers want simplicity and they prefer to deal with businesses that understand their needs. Gen Y and Z customers have grown up with online tools, especially their smartphones. It therefore comes as no surprise that millennials and Gen Z are heavy users of mobile banking apps. In addition, the COVID-19 pandemic has increased the speed of digital banking adoption across several age groups as people reduced in-person visits to banks.
The high expectations of millennials and Gen Z for a mobile experience have led them to seek less traditional “brick-and-mortar” banking partners. Personalized and easy-to-use financial services are giving nontraditional financial services providers an advantage.
Here are four strategies you can implement right now to help ensure your bank doesn’t miss the millennial and Gen Z opportunity.
1) Flexible communication options
We’re living in an on-demand world, and millennials and Gen Z banking customers are looking for flexible options with around-the-clock access to customer service. They should be able to communicate easily on several channels, including messaging apps such as WhatsApp, as well as other collaboration tools and digital assistants. Using messaging apps or social media channels lets customers avoid the long lines of brick-and-mortar locations and the wait times of phone support. Millennials want to interact with customer service in a way that is tailored to how they interact with people in other aspects of their lives. Choices for communication can include virtual assistants on wearable devices, smartphones and home smart speakers. Banks must provide multiple ways for customers to communicate with financial institutions in addition to visiting a branch, and virtual assistants help provide this flexibility.
2) Instant support
Banking customers can receive immediate help from virtual assistants. These tools are becoming more sophisticated by the day to allow customer service representatives to handle other matters. The immediate responses that come with a text or voice command can address a growing number of banking queries from millennials and Gen Z customers. These generations in particular also appreciate the ability to get quick help from services that simplify daily tasks like bill payments, deposits and transfers.
To reach millennials and Gen Z — and any group, really — banks should offer customized services based on consumers’ transactions and expenses. Using transaction history lets financial institutions improve customer experience by recommending personalized offers. For example, a customer with a history of stock transactions may be more receptive to opening an IRA or speaking with a financial adviser to learn more. Marketing to millennials requires loyalty and personalization. Financial institutions use virtual assistants to share educational materials to receptive customers, including personalized financial guidance. The capabilities of conversational AI, or chatbots, help power this personalization. Carefully tailored experiences can differentiate your bank, helping you maintain profitability with new customers that become loyal, long-term fans.
4) An omnichannel user experience
Customers appreciate a consistent, user-friendly, experience across multiple channels. As part of an omnichannel experience, banks should offer easy logins to online banking accounts on multiple types of devices, whether it’s a tablet, smartphone or PC. Since millennials and Gen Z consumers are particularly tech savvy, giving them the ability to use financial services anywhere on multiple channels is essential. To keep the banking experience consistent and seamless, financial institutions can offer digital tools in tandem with visits to brick-and-mortar locations, particularly those that have cafes. Customers prefer to carry out complex transactions such as mortgages and auto loans in person.
Millennials have grown up with access to technology since their early years, and they demand a flexible customer experience from financial institutions that fits their lifestyle. Banks need to show that they understand what customers require from quick, easily accessible tools. With 86 percent of millennials concerned about their long-term financial outlook, easy-to-use tools and a user-friendly, yet educational, customer experience are more important than ever. A quick and intuitive customer experience can keep traditional banks ahead of the game against newer nontraditional rivals.