Millennials are a hot topic for many businesses, as this generation of consumers is now entering its prime spending years. In the US, the cohort - otherwise known as Generation Y - overtook baby boomers as the country's largest demographic, with a population of 75.4 million people.
It's a similar story worldwide, with those born between the early 1980s and early 2000s becoming the key target group for many organizations, including financial institutions (FIs). But how do millennials communicate with their banks? And what can FIs do to adjust their offerings to appeal to these customers?
The changing face of payments
Advances in technology have brought about significant changes in the ways people interact with businesses. Millennials, who have grown up immersed in a world dominated by social media and mobile devices, have a particular affinity for tech innovations.
These trends have affected how individuals approach payments. A 2014 Independent Community Bankers of America (ICBA) American Millennials and Community Banking Study revealed that 23 per cent of those aged between 19 and 37 carry less than $5 in cash every day of the week.
This suggests individuals in the demographic are utilizing other payment methods to buy goods and services. In fact, the report showed nearly three-quarters of millennials said mobile banking is 'very important' to them - the highest of any generation polled.
As consumers begin exploring a range of different payment options, banks must adopt a channel management strategy that effectively caters to evolving demands.
Don't forget the personal touch
The fact that millennials favor technology doesn't necessarily mean they avoid face-to-face interactions, however. Recent statistics from bankrate.com showed Generation Y visit branches almost as much as other age groups.
According to the survey, 42 per cent of under-30s had entered a brick-and-mortar bank within the last 30 days, compared with 50 per cent for the average population. The ICBA study also showed 64 per cent of millennials believe building a relationship with their FI is important.
Clearly, despite the cohort's penchant for technology, Generation Y still places value on high-quality physical interactions at branches. Essentially, FIs must develop a sophisticated omni-channel approach that provides anytime, anywhere banking, yet still gives millennials a reliable face-to-face service when required.
Piecing together the millennial puzzle
Meeting the needs of millennials isn't easy; it's a discerning demographic that expects a seamless consumer experience across various channels, whether it's mobile, online or in-branch.
The ATM was the first “digital” device long before “digital” became a household word. FIs will be successful and remain competitive in today’s ever changing digital landscape by continuing to build upon a true “omni-payment” experience, irrespective of the channel.
Generation Y are utilizing multiple payment methods across a plethora of devices, and banks that fail to modernize their infrastructure as well as operations will quickly fall behind rivals that offer a more multifaceted, personalized approach.