May 06, 2016 under
TRADITIONAL BANKS ARE DEAD
By Mark Cerame, SVP Strategy Lead, RAPP NY
The statistics aren’t encouraging. According to the Millennial Disruption Index, 71% of Millennials would rather go to the dentist than listen to what banks are saying. All four of the top banks are among the ten least loved brands among Millennials. And a full 33% don’t believe they need any bank at all.
Interestingly, 73% of Millennials would be excited about a new offering in banking services—but only if it came from Google, Amazon, Apple, PayPal or Square.
To add to banks’ woes, Millennials are absolutely critical to their long-term growth. This is especially true since many of them will be the lucky recipients of some $41 trillion that is in the process of being passed from one generation to the next, according to a PGDC study.
Even with all of this bad news, it’s not an impossible hurdle to overcome. However, it’s imperative that you start thinking about Millennials in a way that will enable your institution to market to them effectively.
The traditional financial services model that consisted of building multiple branch locations and adding more tellers for face-to-face interactions is simply not working with Millennials. In today’s digitally enabled world, they have become accustomed to service models that deliver a seamless exchange of readily available, relevant information to them, on their terms.
Even though Millennials are, according to Forbes, the most “radically diverse generation in history,” there are certain commonalities among them that can be used to inform your marketing efforts:
Insight: Make your mobile banking app the main focus of your attention—because for Millennials, it is their main branch. Their online experience should be seamless, secure and dare I say it, rewarding. Always. If it’s buggy or doesn’t work on IOS or Android very well, your relationship with Millennials will be irrevocably damaged.
Insight: It almost goes without saying but responsive design is a must. This means your banking app will work equally well on a smartphone, tablet, laptop and desktop.
Insight: Insurance and banking are similar in that they are considered “serious” subjects. Yet the insurance vertical is awash in funny, yet relevant advertising that sells. When was the last time you saw a humorous bank ad? The right kind of humor to Millennials is a unique opportunity waiting to be exploited.
Insight: Give back and Millennials will find you. TOMS Shoes and Warby Parker have grown exponentially using the model of get one, give one. Banks could do the same. For example, every time a personal loan is made, a micro-loan to a person in a developing country is also made. Interestingly, these micro-loans have very low default rates and they would make for great content.
Insight: Banks are famous for lots of fine print. Be the bank that provides translations of everything, so that your audience doesn’t have to be a corporate lawyer to understand it. Be the un-bank and Millennials will flock to your digital door.
Insight: The notion of obsolescence is one that is familiar and comfortable for Millennials and can be leveraged to attract their loyalty. For example, the concept of frequent upgrades and improvements is one that brands like Apple and Nike have infused across all segments of consumers, including Millennials. These brands have reframed the notion of obsolescence through the lens of improvement. Banks rarely, if ever, use the words, “new” or “improved,” yet their products certainly can be marketed that way. “New,” “improved” and “introducing” are trigger words that warrant attention. Just make sure your product deserves it — with real, tangible improvements.
Insight: Pundits are talking about Internet of Things. But I’d suggest it’s also the Internet of Needs. The fact is, consumers use the Internet to serve their personal needs. While this may sound like semantics, it’s actually something you can never ignore when communicating with Millennials. Remember: It’s never about you. It’s always about your customers’ needs, wants and desires.
By communicating with Millennials in a way that’s relevant to them, you can transform your financial institution into a model for how banking relationships can work in the 21st century.