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PhillipBy 2020, Millennials will account for $1.4 trillion in spending. That’s a massive increase from annual current levels of about $600 billion. Already, this generation is 80 million members strong, and their measurable impact is growing exponentially as they age into adulthood.[1] This demographic thinks differently about money and banks than their predecessors. They are financially informed, and prioritize quick, convenient and mobile banking solutions.

To remain relevant as they gain more and more traction, community banks have to reconsider every piece of the branch model, starting with three priorities.

  1. Go beyond banking. Offer financial advice and guidance for the future. These banking customers have a conservative mindset, tremendous professional potential and long term financial goals. They also have a lot of debt – more than half (59%) of Millennials with college loans worry that they will never pay them off.[2] Who better to offer up reliable steps for eliminating this hurdle, saving for a house, starting a family and establishing retirement accounts? Community banks can give Millennials a solid game plan for managing their huge lifetime decisions. Think about ways your bank could partner with other providers (e.g., wealth management guides or realtors) to give them convenient access to the reliable solutions and information they need as their life evolves.
  2. Offer complete and good digital and mobile banking tools. It is no secret that Millennials expect to access everything on their smartphone or tablet. Banking is no exception. In fact, mobile is so prevalent in banking that 81% of consumers would not switch banks if their branch closed.[3] Community banks won’t survive without putting a steady focus on the mobile channel. In fact, the banking app is already considered table stakes. Innovative banks are now developing services like person-to-person payment systems, fully synched financial management tools and remote deposits. 
  3. Customer service still counts for a lot. Despite expecting tools and services to be accessible when and where they want them, Millennials still value face-to-face relationships. The 2015 Consumer Banking Insights Study revealed that 42% of them seek financial advice from personal interactions with trusted advisors.[4] Community banks have the edge against larger counterparts. You have the infrastructure and employees to keep customer service at the heart of your institution, whereas many of the larger financial institutions are unable to generate trust due to size and lack of personalization.

The millennial customer base has already changed the banking landscape indelibly. There has been – and will continue to be – fallout and new leaders. Make sure your bank is being preactive and innovative based on what we know about this demographic and the technology landscape. 

Today, the main reason consumers stay with their bank is a good online banking experience.[5] The immense lifetime value of the Millennial customer is indisputable. Is your community bank nurturing lasting relationships with this group through an innovative multichannel, customer service driven model?

 

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[1] How the Millennial Generation Could Affect the Eonomy Over the Next Five Years, Forbes, April 2015 

[2] 9 Reasons to Scrap Your Marketing Plan for Millennials, The Financial Brand, June 2014 

[3] North America Consumer Banking Survey, Accenture, 2015 

[4] How to Build a Millenial Friendly Banking Experience, BankVue Community Rising, June 2015 

[5] North America Consumer Banking Survey, Accenture, 2015 

THIS POST WAS WRITTEN BY Phillip Branch

Phillip Branch is a senior manager in the HORNE Banking practice. With more than 9 years of proactively serving the financial institutions industry, Phillip is a specialist in areas including external and internal audit, loan reviews, regulatory compliance, mergers and acquisitions, due diligence and internal control reviews and assessments.

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