So, do millennials hate banks or do they love them?
Bankers, you're forgiven if you're a little confused on what to do with millennials given the seemingly endless — and often conflicting — research released about the younger generation's attitude toward financial institutions.
For example, research published in October by the quarterly Cassandra Report, which tracks generational trends, found that this demographic is "turned off" by banks because they do not offer appealing products and services. Scratch, a subsidiary of Viacom, which surveyed 10,000 people born between 1981 and 2000 as part of a project called the Millennial Disruption Index, reported that banks are not only among the most unlikable brands with this demographic, but one-third of those surveyed believed they would not need a bank at all in the future. A report released this month by the Center for Generational Kinetics said that some 5 million millennials don't even have a checking account, citing distrust in banks as the main reason.
This is just a small sampling of the reports released on this topic. But it may not be all doom and gloom when it comes to banks and their relationship with millennials. The research firm CCG Catalyst said its survey of 450 consumers in the 18-to-35 age range found that 90% have a relationship with a traditional financial institution.
The disconnect between CCG's findings and others likely relates to sentiment. Millennials don't necessarily dislike banks — they just want them to be better. They want that institution to act as an "overall financial caretaker" for them, said Paul Schaus, CCG's president and chief executive.
"Millennials want their banks to advise them," he said. "They want advice on how much to save and budget. Banks need to redefine the relationship they have with customers."
For the generation largely made up of people who do not remember a time before the Web and are often described as living on their phones, CCG's research about digital adoption might be somewhat surprising: 46% use checkbooks, 68% use online banking, 44% send money digitally and 39% use mobile remote deposit capture. Those figures might show a bias to digital services compared with the rest of the population, but they clearly show that millennials are far from digital-only customers.
"As banks transform their business strategy to cater to this generation, they must understand that while this group wants more automated functionality, they still expect to maintain control over their banking but want human connection when they need it," Schaus said.
The challenge is being able to balance the two. Millennials still very much rely on the personal touch of banking, but will judge a bank on the basis of its digital capabilities.
"The most recent J.D. Power Retail Banking Satisfaction survey found that large banks had a higher satisfaction rating than both community banks and credit unions for the first time ever," said Jim Marous, co-publisher of The Financial Brand. "This change in fortune for the once-hated 'big banks' was a direct result of the higher satisfaction around digital banking service offerings."
"We have also found that this higher level of satisfaction was not just from millennials but from digital consumers across demographic segments," Marous added.
While big banks are improving their reputation among millennials with digital products, the $1.2 billion-asset Avidia Bank is targeting millennials by not acting like a traditional bank in the community but still offering top-notch digital banking services.
The bank in Hudson, Mass., rolled out Cardless Cash by FIS last August, well ahead of several of the large banks announcing earlier this year that they would introduce cardless ATMs. It is also working on a real-time payments service and a digital wallet.
It also has brand ambassadors, called the "Avidia Smarties," who use social media for things like promoting community events, reviewing local restaurants and sharing financial advice. The group also makes appearances at local events but takes a different approach than just renting a booth at a county fair.
"Millennials are typically not scouring the Internet to find the coolest free checking account," said CarrieAnne Cormier, assistant vice president of retail operations and strategy at the $1.2 billion-asset bank. "They're looking for things they identify with."
Perhaps the key to courting and retaining millennials, and digital customers overall, is to give them good options. That idea is the basis of BB&T's U platform, which it rolled out in October. On the platform, customers can create and customize a personal financial dashboard on any device, view accounts and investments from BB&T as well as other financial institutions, make person-to-person payments to anyone and schedule an appointment with a banker.
"We understand all our clients, especially millennials, want the ability to bank how they want and where they want, and that's what U is all about," explained Ricky Brown, president of community banking at BB&T. "And this is just the beginning. As U evolves, we're going to continue to offer our clients the features they want and expect."
Brown added that the customizable aspect of U — customers can, for example, control the design, the colors and how they view features — make the platform appealing to a younger set.
"As our world becomes more and more digital, we believe that U positions BB&T very well for the long term to attract millennials who want more control over their financial lives," he said.
Millennials expect that banking will, and should, change and serve them differently than it did their parents' generation, said Derek Corcoran, chief experience officer of Avoka, a digital customer-acquisition vendor.
"They've seen that change is possible and it's created a sense that they can influence change and disrupt entire industries by their consumption habits," Corcoran said. "Look at the music industry, for example. Now you can have any song in the world in your pocket. They have the same expectation of banking: that everything should be digital and should be easy."
Robert Barba contributed to this article.