Karen Wheeler, Vice President and Country Manager UK, Affinion looks at millennials and banks.It’s official: millennials see their phones as crucial to their banking needs. According to a new global survey by Legg Mason, almost half of UK millennials want to do their financial planning on a smartphone. This poses questions over the future of the high street; which has traditionally been the environment for banks to face-to-face relationships with consumers, but footfall is falling due to the rise is mobile banking. The British Banking Association (BBA) found that in-branch visits declined from 476 million in 2011 to 278 million in 2016 – a 32 per cent fall. It’s clear that investment in digital banking is a priority for banks, but does a human service still have a part to play in the overall customer experience? How can banks meet the expectations of millennials – and build relationships which encourage engagement and loyalty?
Engaging through digital platforms
Millennials have been raised in the midst of a digital revolution, so it’s no surprise that they are natives when it comes to smartphone adoption. In its study of over 6,000 millennials, Qualtrics found that they check their phone up to 150 times per day, and they can’t go more than five hours without checking social media.
With millennials engaging with a proliferation of social media website and apps throughout the day, it’s important that banks capitalise on this engagement and offer an engaging digital experience that becomes a part of consumers’ everyday lives. Banks know they need to invest in technology that makes digital interactions simple, seamless and akin to the user experience that consumers expect from smartphones.
As an example, earlier this year Santander launched a pilot scheme that allows consumers tomake payments with their voice by talking to their smartphone app. This is a trend we can expect to see continue, as natural language processing (NLP) is becoming big news in the way consumers interact with businesses. Research by Radiocentre estimates Amazon Echo will be in 40 per cent of UK homes by 2018. Given the advances of voice-activated tech in the home, it’s understandable that banks are eager to understand how they can incorporate this into their own digital offerings.
In the era of selfies, banks are also working hard to integrate the camera functionality in to the mobile experience. Lloyds, Halifax and Bank of Scotland are all experimenting with biometrics in the security process, allowing consumers to log on to their online accounts by taking a photo.
If banks can offer the kind of digital experience that millennials expect, they will be more likely to become a valued part of their everyday lives – which can lead to loyalty at a time when it’s harder than ever to retain customers.
Don’t neglect the human, personal service
However, despite millennials embracing smartphones for their banking needs, the Legg Mason report found only 16 per cent of UK respondents were in favour of either technology-only financial planning which has no human interaction, or a solution that is technology-led but has some human interaction supporting it.
This shows that a balance needs to be struck; millennials want a mixture of both technology and human service to meet their needs. After all, there is only so much a chatbot or app can do. When it comes to complex, personal financial decision-making, it’s understandable that millennials still value advice and support from bank’s employees.
Research from Lexis Nexus found that, when it comes to opening an account 61 per cent of UK millennials prefer to do it in person – rather than online. This is the opportunity for banks to begin building a relationship with millennials; offering a positive experience that they’ll remember, while providing an opportunity to introduce them to relevant products and services that can benefit their lives.
Be aware of where millennials seek advice
It’s also important banks understand the factors that influence millennials when it comes to choosing their financial providers. According to our global research, banks shouldn’t underestimate the power of peer-to-peer advice, as more than half of consumers (55 per cent) follow their parents and other relatives when deciding where to bank.
Consumers perceive their relationships with money to be important and, consequently, care about where they put their money and pay close attention to what banks say and communicate. It’s therefore important that banks nurture relationships with every generation of their customer base. For businesses, advocacy is an invaluable tool when it comes to attracting new people, so they should ensure they are meeting the needs of every demographic and building positive relationships.
Be open-minded about the future of digital
The brakes are most definitely off when it comes to the pace of technology; every day brings new developments in the way businesses are using it to evolve the experience they offer consumers. What banks need to keep sight of is understanding the whole customer journey; from the factors that influence where people decide to bank, to the digital and face-to-face service that will make them more likely to stay. Being a part of the digital revolution is essential for banks to keep pace with millennials’ expectations – and will set them in good stead for keeping customers loyal in the long term.