By Tim Evans, Strategy and brand director, Verus360
As a consumer group, Millennials (those born in the last quarter of the twentieth century) are a hot topic. As far as financial services marketers are concerned, this potential audience is also an extremely desirable one, possessing high levels of loyalty to their chosen products and services, tech savviness, and a willingness to act as ambassadors for their favourite brands through word-of-mouth recommendation.
According to a recent survey, however, financial services brands are making little impression on the 18- to 33-year-old demographic.
The Moosylvania advertising agency report lists the top 50 brands favoured by Millennials. The analysis is based on factors such as product quality, corporate responsibility, and resonance with their own personalities. While it’s no surprise to see names such as Nike, Google and Apple flying high in the popularity stakes, what’s notable is the total absence of any financial services providers in the list.
So how can finance brands connect with this sought-after audience?
Here are four core strategies for the sector to consider.
1: Ensuring accessibility
A seamless user experience and ease of doing business are key considerations for Millennials. Having grown up with the internet, these digital natives prefer digital interactions to phone communications, face-to-face meetings and the paper-based processes favoured by traditional financial institutions.
Providers need to develop customer-facing tools that simplify Millennials’ lives — including price comparisons, product information and personal finance advice in the form of easily accessible resources, such as mobile apps and podcasts.
2: Utilising social
Aside from a few notable examples, such as Barclays’ recent announcement that users of its Pingit app will be permitted to transfer money to other people via their Twitter handle, or US investment firm Charles Schwab’s carefully targeted financial advice on Facebook, the financial services sector has been slow to exploit the engagement opportunities offered by social media.
Millennials tend to dismiss being marketed to by banks, and count the ‘Big Four’ high street banks among their least trusted brands. They put great faith in the power of the ‘sharing economy’, however, and often make decisions based on online peer recommendations. Social is a great way to tap into this.
3: Offering alternatives
As Millennials fast become the next generation of entrepreneurs, CFOs and CMOs, they’re more likely to seek out alternative finance (AltFi) models to fund their businesses. The crash of the financial services market has shattered their trust in traditional lenders, leaving them ready to look at new ways of banking and borrowing.
According to a 2014 report by innovation charity NESTA , this younger audience is far more receptive to AltFi funding routes, including equity, reward, and peer-to-peer (P2P) crowdfunding.
4: Embracing change
According to the, Millennial Disruption Index, more than two thirds of those surveyed thought that, in five years’ time, the way we access cash will have changed entirely, while one third predicted that there’ll no longer be a need for banks. Instead business payments and consumer transactions will be contactless over secure cloud technology.
Whereas older consumers might mistrust new ideas, Millennials tend to welcome them — so providers need to be flexible, ready to explore new ways of working, and nimble in their response to continually evolving demands.
It won’t happen overnight, but financial services providers need to step up to the mark fast, to harness technology and to win the loyalty — and spending power — of this attractive demographic.