Pick a bank – just about any bank at random – and it will tell you how it is really committed to targeting the millennial segment.
But are they getting it right? For old misery-guts such as the writer, it often seems that some banks are forgetting a well tested mantra of ‘follow the money’ and target efforts first of all on customers who are currently the most profitable; and customers most likely to purchase a wide range of products from savings and investments to mortgages, premium credit cards and pensions.
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But no – one might be forgiven at times for thinking that entire banks marketing efforts are focused on teenagers addicted to Snapchat, Netflix and WhatsApp, but with little by way of disposable income.
So our random bank invests massively in social media. It designs wonderfully informative, colourful apps. It invests in Personal Management Tools because the poor dears aged in their 20s cannot possibly be expected to budget without something on their smartphone telling them at a glance how much they have spent on Spotify or in the Apple Store.
The bank spends massively to articulate their mission and aims to elicit an emotional response to its brand, because ‘millennials want to be a part of something bigger’.
The bank will target so-called ‘early-adopters’.
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By GlobalDataMillennials, so the argument goes, sneer at traditional advertising so instead, our random bank will spend a huge chunk of money on external marketing experts and consultants to create great content to ‘engage with millennials’.
They will tell the bank that millennials do not appreciate salesy gimmicks but do like firms that invest in ‘community building’.
And hammer home how well Uber and Airbnb have done by focussing on convenience- and Amazon. If only the bank could make banking as easy as buying in one click from Amazon, because millennials lead such busy lives they cannot be expected to take out a new product or service if it cannot be accomplished in seconds.
‘Key influencers’ is another good line. The bank will be told by its marketing expert, with perhaps as many as a few weeks experience of banking, that you need ‘key influencers’ to be part of the ‘community’.
Next up is usually customisation. Heaven forbid that a bank is guilty of not embracing uniqueness and individuality – millennials will not have patience with an app or a website that cannot be customised.
Then there is video: the millennials love online video, so our random bank better set aside a six or seven figure sum to invest in video content that millennials will engage with and share.
Millennials love online reviews because they are apparently incapable of making a major decision until they have discussed it with folks they trust – so the bank best ensure that they have great online reviews and customer experiences.
Well chances are many of the millennials still live at home; are more interested in entertainment and paying rent than in financial services.
Much like their parents were at the same age.
At last along comes a report, well researched and well thought out that suggests many banks have been focusing their marketing efforts on the wrong segment of millennials.
‘Misunderstood Millennials: Have Financial Institutions Got it Wrong? Published by conducted by Osterman Research for Mitek suggests that younger millennials – those aged 18 to 22 years – are not yet financially independent.
It argues that it is only when millennials reach 29 to 34 years that financial services become a necessity. This, combined with the fact that millennials in this age group are becoming occupied with the “busy-ness” of life – such as advancing in their careers, purchasing homes and starting families – makes them a prime market for a variety of financial services. In short, financial institutions that market to younger millennials are aiming their marketing efforts in the wrong place and to the wrong people.
The increased cost of education and housing has meant that younger millennials are more concerned with paying off student debt and affording a place to live than with their financial future. This changes as people get older, join the workforce and develop savings goals and habits. Older millennials have more disposable income and so are more focused on their futures, saving for homes with ever-increasing prices and planning for a retirement without state pensions.
Report highlights include:
- 40%of millennials in the UK have signed up for a new financial services account, such as a checking account or a credit card, using their mobile device; both in the UK and the US,millennials have a greater likelihood to use their mobile devices for signing up for financial accounts as they get older;
- 27% of UK millennials have found current mobile sign-up processes to be either slow and cumbersome, or so poor that they abandoned the sign-up process completely;
- among UK millennials who were not able to complete the sign-up process for a financial account using their mobile device, 56% found a different institution that would support their desired mobile experience, while 25%went to a traditional “brick-and-mortar” establishment;
The fact that well over one-half of millennials switched to a different institution when they were not able to complete an application on a mobile device should sound alarm bells among decision makers, since it underscores the critical importance of the mobile experience and the relative lack of brand loyalty among many millennials.
On one very positive note, the report finds that the banking sector is considered by UK millennials to offer the best mobile experience in the context of convenience, functionality and security: 48% rate their mobile banking experience as “good” or “excellent” against retailers 39%.
The figures for car services (eg Uber) 32%, airlines 29% and telecoms 23% all trail banks significantly.
About the most depressing stat in the report is the finding that 17% UK Millennials take five or more selfies on a typical day, with 3% taking 20 or more per day.
In the US, the proportion of millennials taking five or more selfies per day increases across the different age groups, whereas among Canadian millennials, it decreases as they age.
43% of millennials would like to authorise purchases for products and services using their selfies – only 3% do so today; 38% of millennials would like to verify their identity using selfies, but only 7% do so today.
This indicates a significant, unmet demand from millennials in the UK who want to use selfies for a greater variety of commercial and other transactional activities, if only they were permitted to do so.
For this writer’s part, let’s hope this is just an added option and does not become compulsory.
