A new report by the digital banking form Alkami has highlighted issues and opportunities unique to the Millennial demographic. As highlighted by a recent Financial Brand article, the Alkami study shows that U.S. consumers aged 28-44 represent a great opportunity for financial institutions as they have reached the point in their lives where they are more likely to need and therefore more likely to acquire financial services. One important trait highlighted by the study is that 46% of Millennials define their primary financial institution as with whom they have their online / mobile service. Thus, emphasizing that the digital-first, digital-forward strategy for FIs is a must if they want to get this demographic to increase wallet share of financial services. Again, from the Financial Brand story, here are the study’s key takeaways: Millennials are 2.5 times more likely to increase their number of financial providers over the next year compared to Gen X and Baby Boomers 73% of millennials report that rising interest rates have significantly impacted their standard of living The digital banking experience is crucial for millennials, with 61% considering it very important Millennials have 14% and 28% more products with their personal financial institution than Gen X and Baby Boomers, respectively 65% of millennials value relevant product recommendations in their digital banking experience, significantly higher than other generations The percentage of Millennials that have more products with their primary FI than either Gen X or Baby Boomers was surprising to me. There is always the assumption that this generation was focused more on Venmo, PayPal and other P2P services. Yet as they age, the complexities of their financial needs grow, and this in turn presents opportunities for full service FIs that have strong digital service and delivery solutions. Combine that with this fact: 63% of Millennials are living paycheck to paycheck. This financial strain exacerbates the issue that some of these Millennials never received any education or training on basic money management. This is another area of opportunity for FIs to get financial education and wisdom into the hands of this demographic in a manner best consumed by them. This could be fun, information videos delivered via mobile. The need for strengthening the FIs digital presence is paramount. Millennials are digital natives, they do not “adapt” to a user experience they feel is outdated or outside of their expectation. They “know” what a great digital experience is due to the nature of the myriad digital experiences they have from shopping, gaming, surfing and social. To this point, the survey indicated that nearly half of all Millennials abandoned financial tasks due to the poor nature of the experience. This leads to 58% saying they would switch providers if it meant they could get an enhanced experience. With regards to the use of AI to enhance that experience, Millennials are ready for that with 51% stating they would like to have improved customer experience powered by AI. What really drives up the positive experience is personalization. Millennials crave this almost above all else. 65% of Millennials say they value relevant product recommendations. Note the word “relevant,” you can’t just throw up banner ads; they must be contextual for that customer, be paternalistically beneficial and most important, be something the customer does not already have. Most FIs are not even looking at customer profiles, analyzing data and / or making recommendations based on what other similar customers find valuable. About half of all Millennials bank with large, regional financial institutions. Community FIs can step up to attract this important demographic by making a commitment to a digital-first delivery. However, the digital experience is not just having a mobile app. It is about managing the entire customer experience from end to end, covering all of the customer facing touchpoints to generate a cohesive, integrated and customizable online experience that thrills and delights customers, especially Millennial customers. Resources https://thefinancialbrand.com/news/millennial-banking/how-to-crack-the-code-on-banking-for-millennials-179442/ The views expressed in this blog are for informational purposes. All information shared should be independently evaluated as to its applicability or efficacy. FNBB does not endorse, recommend or promote any specific service or company that may be named or implied in any blog post.