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5 Ways to attract millennial customers in banking
Credit unions and community banks can’t afford to ignore the needs and opportunities presented by this demographic.
Many businesses are interested in attracting millennials. After all, they’re quickly surpassing boomers as the largest demographic and many have a different approach to small businesses and start-ups than previous generations. Specifically, a whopping 1 in 5 millennials plan to forgo corporate work and start their own enterprise. This can put credit unions and community banks seeking to expand their customer base in a unique position. The business model of these financial institutions is well-suited to the approach of millennial start-up leaders. A number seek personal connections and support smaller operations. This blends well with financial institutions who promote membership, one-on-one attention and customer benefits over profit.
So why isn’t this relationship flourishing? This demographic can be difficult to reach as they’re half as likely as boomers to show brand loyalty to financial institutions. Right now, three quarters of credit union members are older than the millennial generation. This can become problematic for organizations, as these demographics have already made their big purchases like homes and businesses. Their banking practices are likely winding down, meaning they’re not as profitable as their counterparts. Millennial entrepreneurs, on the other hand, have an average bank loan of almost $45k for their businesses and are most likely to apply for funding, compared to all other age groups. In fact, attracting millennial banking customers might just be the key to future success for both community banks and credit unions. Here’s how you can grow your share of this market:
- Digital First: Millennials conduct much of their life digitally on phones and tablets. It’s viewed as both a time saver and convenience so if businesses do not offer an online option, it may be more difficult to draw these younger customers. Some organizations offer banking functions that can only be utilized with an in-branch visit. For example, sometimes international payments require a personal visit. Though this may seem like a minor inconvenience, with fierce financial competition, this is often enough to lose a customer. Consider this: over one quarter of millennials have never visited a branch.
- Mobile-friendly: It’s may not be enough to offer an online banking platform, it should also be accessible on a mobile phone. Increasingly, customers are using their smartphones as their primary device for booking travel, shopping and communicating. Banking functions, especially B2B actions for busy owners, need to be mobile-friendly to attract new customers. Millennial customers are 2x more likely than boomers to name mobile apps as their most important banking feature.
- International: Today’s small businesses often have international components. Whether it’s sourcing cheaper materials, selling products overseas or employing foreign workers, today’s operations are more global than ever. Offering a platform for foreign currency payments can be an effective way to lure those starting a company.
- Tackle Challenges: A recent survey showed that the biggest problems for millennial small business owners relate to cash flow, time management and administrative work. If your platform can help solve these issues, it can be a huge selling-point. The WU® GlobalPay for Financial Institutions platform helps streamline these issues and reduces the manual effort involved in these actions.
- Information: This age group seeks resources and advice. They’re less likely to be aware of their available assistance than other demographics. If your financial institution can offer articles, how-to guides or one-on-one sessions, it could provide an advantage to those looking for a bank.
The millennial population is becoming increasingly important to all organizations. Credit unions and community banks can’t afford to ignore the needs and opportunities presented by this demographic. Marketing to this group could be a big source of revenue for all financial institutions – if they’re willing to adapt.