Of late, there’s plenty of commentary and dialogue surrounding the habits, needs and desires of millennials. And as you very likely already know, they are a highly sought-after consumer for most industries, including financial services.
Disclosure: I’m sharing opinions in this post as both a financial services professional and as a member of the millennial demographic. Enjoy.
We Appreciate…No, Expect Ease and Convenience
Any time a window pops up on my laptop or iPhone asking me to take a survey regarding my financial literacy, I typically oblige because I’m interested in the questions they’re asking and curious about how I stack up among my peers. As I answer the questions, I most often give rankings/scores of four and five, “agree,” and in some cases, “strongly agree.” My favorite question to date has been one that I thought in Finance 101 was a trick question – “As bond prices increase, bond yields fall.” Strongly agree.
While I like to think that I have a good understanding of personal finance, that does not mean that I always make the best financial decisions. For example, I am financially-literate enough to understand that I don’t owe federal tax on a U.S. Treasury Bond, but I will on a CD. That doesn’t necessarily mean that I’ll buy the bond, though. Why? BECAUSE BUYING THE CD IS EASIER.
As a financial consumer, my decisions do not always make complete financial sense. Sense, yes. Complete sense, no. It’s the digital experience and ease that ultimately steer my decision making and what I ultimately buy. If you want to take this out of the financial services world, there are countless examples of companies who not only understand, but are capitalizing on this, such as Uber, AirBNB, and even Starbucks with mobile ordering, etc. There are however several companies in financial services who “get it,” as well.
Examples of Companies Winning Millennial’s Money in Financial Services
Marcus by Goldman Sachs: Instead of buying a one-year note from the U.S. Treasury, why not buy a CD from Goldman Sachs? A friend of mine was anxious about taking on a risky new job, so “bought” the shiny thing from Goldman Sachs instead of a federally tax-exempt bond. Goldman Sachs didn’t even have an app at the time, yet it was easier to buy a CD online from Goldman Sachs than a bond from Treasury Direct.
Since my friend’s original purchase, Goldman Sachs has rolled out their new app and it is phenomenal. This is a good example of the best-in-class getting their innovations to market quickly and then adding and iterating – you can do that in the digital world. It’s not like building a brick and mortar branch and then being stuck with it until you write down the entire value of the building.
Apple Card: Another example of the “shiny thing.” It even changes color. Say it with me – “ooohhh, aaahhh.”
Though this is not exactly the case across all of Apple’s products, the support here is really solid. Getting in touch with them is easy – you just tap the ellipses in the top right hand corner of the card and it then takes you to a page where you can message, call or visit the website. Click, “message,” Boom. Now we’re in an Apple Business Chat (which is really a messaging conversation).
From there, you’re actually speaking with an expert. They gather your intent and determine which specific product you’re asking about and transition you to where you need to go to resolve the problem or answer the question. This is product “stickiness” in practice. The support makes it easy to keep “tapping” instead of “swiping.”
Erica by Bank of America: Man, this product is legit and getting more legit every day. It makes filling out new hire paperwork much easier for example. How you ask? A customer can easily look up routing and account numbers to simplify direct deposit set-up during onboarding, saving time AND making it easier to get paid.
The product is also gaining functionality for other things like tracking spending habits. Did you really spend THAT much last year? Gulp.
It still has a ways to go though. How much did you spend on a non BofA linked credit card last year? Does it double count payments? Grouping spending by category is a bit weaker than it could be, etc.
What These Products Have in Common & What Banks Can Learn
Simply put, ease. They make consumers’ lives “easier” in some fashion. They either save time, reduce frustration or keep you in the form factor that you prefer.
Not to be overlooked – experience. They are visible to the consumer where they need to be, have immediate feedback to limit guessing along the customer journey, and all have good aesthetics and branding.
They also all demonstrate real investment from the companies offering them. If you’re a regional or community bank and have less of a build centric approach, you can buy components of what you need from your existing digital providers, fintechs and strategic vendors.
Market those areas of investment to generate buzz. This is also a good area to educate your customers on a first use case for whatever you decide to offer to the marketplace.
Roadmaps for innovation are important, but with things moving so quickly, openness to new ideas is key. And besides, a lot of Millennials don’t own cars.
Where we’re going, we don’t need roads… just APIs.