Millennials & Banking
Millennials are fickle, tech-savvy customers on the hunt for low fees and maximum convenience, according to results from a 2014 survey conducted by Californian business software firm Fico.
Key findings from the survey, which questioned nearly 1,000 18- to 34-year-olds in the US, were presented during a webinar hosted by newspaper American Banker earlier this week.
Many millennials initially sign up to the same banks as their parents. However, they are far more likely than any other age group to switch banks, the survey found. They are also three times more likely to open a new account with a new bank, and five times more likely to close all their accounts and switch banks completely. The most common reasons for switching banks included high fees, poor customer service and a poor ATM network in their local area.
One common misconception is that millennials aren't interested in credit cards. In fact, the survey found obtaining a credit card is one of the top financial priorities for millennials over the age of 21. "Credit cards are very much on the millennial wish list," said Rich Dougherty, senior client partner at Fico.
On-the-ground interviews also revealed strong demand for apps and services that help millennials better manage their money, such as by parcelling up spending into different categories, or sending warning alerts when an account reaches its spending limit. Popular mobile payment app Venmo was praised for its speed, convenience and low-cost offering.
"They really are a cross-channel generation," said Joshua Schnoll, senior director of product marketing at Fico, who urged listeners to provide "frictionless" services for use on the move.
Increasing competition from non-traditional services such as Venmo is sparking innovation in this sector. Earlier this month, British high-street bank Barclays launched the UK's first remote banking service, which allows customers to get face time with advisers at any time of the day on their mobile phones.
For more on the future of banking for digital natives, see Bite-Size Banking.