Chris Barlow, Vice President of Mobile Banking at Webster Bank, provided an overview of the Millennial banking customer and whether they’re leading the digital banking revolution.
At the outset of his keynote presentation at the 2018 Leadership in Digital Marketing Forum held on February 8 in Boston, Barlow asked, “What’s all the buzz about Millennials? Millennials are the largest living generation in the US and are poised to have the most spending power and wealth. There are nearly 80 million Millennials now, and, within the next five years, they’ll make up half the workforce,” he stated.
“Millennials are the largest living generation in the US and are poised to have the most spending power and wealth. There are nearly 80 million Millennials now, and, within the next five years, they’ll make up half the workforce.”
Barlow talked about how customers like to interact with their bank. “Nearly 70% of all banking interactions—regardless of age group—are digital. A user-friendly, feature-rich, mobile app is an expectation of all generations, but Millennials use mobile as their primary channel. For most banks, 54% of their customers are mobile users. Mobile means having the whole bank in your pocket,” he noted.
“The features that drive engagement for mobile-banking users include bill pay, account alerts, mobile deposits, balance or wire transfers, and access to spending summaries by category. Americans who mobile bank once a week or more (71%) are more aware of their financial standing than those who mobile bank less than once a week (49%). Mobile bankers report being ‘very confident’ (65%) that they know the exact balance in their bank account compared to 53% of non-mobile bankers. Nearly 60% of mobile-banking users deposit cash or checks within a day of receiving them compared to 42% of non-mobile-banking users. More mobile-banking users than non-mobile-banking customers are satisfied with their bank—73% versus 67%,” said Barlow.
Customers want to see the following features on their mobile-banking platforms:
• Faster deposit or withdrawal options
• Faster balance or money-transfer options
• More innovative security measures such as fingerprint- or retinal-recognition log-ins
• Better budgeting tools such as the ability to set spending limits
“Who do customers prefer to have manage their finances?” asked Barlow. “Overwhelmingly, US customers want their primary bank to meet their financial needs. However, despite customers’ intentions, digitally savvy competitors are grabbing market share, especially from banks not offering certain digital capabilities. The challenge for banks is improving penetration with their existing customer bases. Currently, only 41% of customers have a credit card with their primary banking provider—and only 19% use their primary bank’s card,” he stated.
“Overwhelmingly, US customers want their primary bank to meet their financial needs. However, despite customers’ intentions, digitally savvy competitors are grabbing market share, especially from banks not offering certain digital capabilities.”
Barlow then discussed whether behaviors are shaped by generation or by life stage. A study by FIS grouped consumers based on life events rather than age only and came up with a “super segment” of high-income, highly active banking consumers known as Gen MX (senior Millennials and Gen Xers). “Members of this group experience the same life stages, such as paying for college tuition, starting a business, planning for a wedding, or buying a house,” said Barlow. “Members of Gen MX have identical rankings for what they expect from their primary banking institution: safety, security, fairness, connectedness, reliability, simplicity, transparency, omnichannel, aspirations, and control. Both Gen Xers and senior Millennials prefer digital banking but don’t yet have the ‘mobile first’ preference of their younger counterparts, and both these groups most frequently bank online, followed by mobile banking,” he said.
“Both Gen Xers and senior Millennials prefer digital banking but don’t yet have the ‘mobile first’ preference of their younger counterparts.”
“Millennials view mobile as making their life easier. Some 71% are willing to grant access to all their mobile data to personalize their experience. 43% want the mobile service to become more useful for everyday activities. 41% say they want their mobile phone to serve as their personal wallet for storing multiple payment methods. And 35% say they want even more hands-free ways to pay using their phone or other devices/technologies—wearables, voice control, virtual assistants.” Barlow noted that Millennials need more help managing their household budgets, tracking and forecasting spending, and reviewing savings and investments.
Interestingly, Baby Boomers are better at digital security than Millennials. They’re more likely to use strong passwords and less likely to have their passwords hacked.
“Do Millennials really lead digital banking?” Barlow asked again in closing. “I think that’s a myth. We’re all digital citizens, and we all think digital banking is important.”
ABOUT CHRIS BARLOW:
Chris Barlow is Vice President of Product Management for eBanking for Webster. With over 15 years of creating online experiences, he’s worked for Financial Services companies such as USAA, Citibank, Standard & Poor, and American Express. Chris ran track and studied Organizational Behavior at Stanford University. Outside of work, Chris is many things: DJ and international music enthusiast, science fiction geek, cyclist, sports nut, and doting father. Reach Chris at firstname.lastname@example.org and follow him on Twitter @barlowdigital.