This article is by Steve Satchell from Teleperformance USA…
How can banks keep their millennial customers? With the millennial demographic being so extremely digitally engaged it’s difficult for traditional retail banks to compete with app-based Financial Technology (FinTech) companies offering specific financial services direct from a smartphone.
Recent Gallup research suggests that only 30% of millennials feel engaged in any way with their primary bank. In the US this is a group of over 73 million customers – if two-thirds of these people feel very little connection to their bank then we are talking about over 50 million dissatisfied or indifferent customers.
The Gallup data shows that 8.4% of millennials recently switched their bank. That may not sound like a big number, but that is 2.5 times more than the Baby Boomer generation. Millennials don’t feel engaged by their bank and they are much more likely to move on than any other generation. The researchers at Gallup suggest four important steps that banks may want to consider if they want to more effectively engage with millennial customers:
1. Predict what they want; use the information you have on their habits and spending patterns and start offering services they probably want, based on their behavior.
2. Make it easier to engage; nobody wants to walk into a bank branch at 10am. Make it easy to engage online, via an app, and in person – be more approachable and available.
3. Break some rules; every customer goes overdrawn by mistake now and again. Drop the penalties. Make the customer say ‘wow’ because you didn’t behave like a bank.
4. Differentiate your service; understand the customer journey. How do your customers learn about new services and use them? Make it easier to use omnichannel services and set yourself apart from your immediate competition.
That’s great advice from the Gallup team, but it underlines an important problem. Many retail banks just don’t seem to understand what their customers want. It’s not just an issue for millennials. If your loan application procedure has not been updated since the 1980s then do you really think the smartphone generation is going to find those procedures engaging?
Let me know what you think about how Retail Banks can gain and maintain loyalty in this critical customer segment. Better yet, what do you millennials think?. Leave a comment here or get in touch directly via my LinkedIn.
Photo by Deutsche Bank licensed under Creative Commons.