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Community banks need to rethink their technology and marketing to ensure they are snagging a piece of the millennial generation. Big banks have the lead in reaching this demographic, but they are vulnerable, experts said.
July 25 -
Though satisfying examiners remains a priority, their decisions about how and where to deploy resources are being mostly driven by the desire to meet customers' changing demands, according to a new survey from the advisory firm KPMG.
July 29 -
Bank of America released its inaugural "Trends in Consumer Mobility Report" on Monday, which revealed that out of 1,000 U.S. adults, 47% admitted they would not last a day without their smartphone.
June 30 -
Under-35 consumers find more value in retailers loyalty programs than they do deposit accounts, and its up to banks to figure out how to capitalize on that transaction-first mindset.
June 23
Banks need to develop effective ways to engage millennials, a growing segment of the population, and the best way to do this is through mobile devices, according to Fair Isaac.
FICO
Out of the 911 bank customers surveyed by the vendor known as FICO, one-third of millennials cited excessive service fees as the single reason for switching to a new bank. Meanwhile, bad experiences with online and mobile devices made a much worse impression on millennials than on other age groups.
This is because millennials are significantly more likely to transact with their banks through mobile applications. For example, FICO said that 63% of millennials surveyed used their bank's mobile application, while this figure dropped to 54% for Generation X consumers and 36% for baby boomers.
Furthermore, 83% of the survey respondents who use a bank's mobile application at least once a week expressed satisfaction with their financial institution. By comparison, 71% who do not utilize mobile devices to do banking were satisfied with their bank.
"Banks that have made the mobile investment need to encourage their customers to actually use their mobile app, especially millennials who use smartphones and tablets to manage all aspects of their lives," said David Vonk, who leads the North American banking practice at Fair Isaac, in a press release. "Mobile apps present a tremendous opportunity for banks to grow customer loyalty and add value."
However, many millennials do not know if their primary bank offers a mobile app, as 21% cited this reason for the lack of engagement with a bank. Additionally, millennials want to be notified via text messages if their bank account has any suspicious charges or is nearing a credit limit.
"With pressure growing from mobile and web-based financial service providers, traditional banks are finding it extremely important to keep existing customers engaged and satisfied," Vonk said. "Mobile apps give banks the opportunity for frequent, positive interactions with customers, especially millennials, an even larger generation than the baby boomers. It's an opportunity banks can't afford to miss."
