As an older millennial, I’ve witnessed firsthand—and quickly picked up—the many time saving services offered by my bank. Mobile apps have literally changed how I (and so many others) bank: Paying bills or depositing a check is now quick and painless and running to the bank is pretty much off my boring errands list. Or is it?
Capital One, knowing many millennials like me have zero interest in going to the bank, recently launched Capital One Café locations, which are more like a Starbucks than your typical bank, offering customers coffee and a place to enjoy it.
This is a great idea and test to keep and attract younger customers. Other financial institutions should take note and also find new ways to service younger prospects to continue to compete. Here are three reasons why:
Millennials need help with their finances.
Whether it’s consolidating the mountains of student loan debt or investment guidance, there’s no question millennials need financial advisement. A Fidelity study found that some 42% of millennials invest too conservatively after the 2008 financial crash. When it comes to the big decisions such as investments and loans, human communication is preferred.
Growing competition from digital banks.
Digital banks that do not have physical locations and are more mobile focused have an advantage with the always-on-their-phone millennial audience. No physical branches mean these banks can afford to offer higher rates and lower fees than traditional banks. However, no in-person assistance is a big negative: Sometimes, you need to talk with a person for the best customer service (see my first reason above).
Millennials aren’t afraid of change.
If millennials feel they aren’t being treated properly, they are two to three times more likely to switch banks than older consumers. Primary reasons for changing banks include negative repercussions for a missed or late payment or the lack of branch and ATM locations. In the past, older consumers would stick with their bank not out of loyalty, but to avoid the hassle of changing banks. With all the options available, it doesn’t take much to lose a millennial.
Moving forward, financial brands must find a way to strike the right balance with millennials by offering the digital convenience they demand while still providing outstanding customer service when it’s needed. After all, aren’t we the generation that’s supposed to want it all?