Bankers get straight talk — and surprising insights — from millennials
No demographic today is more dissected in the financial services industry than millennials. And for a good reason.
Let’s take these numbers into consideration for a moment:
- There are some 90 million millennials today in the U.S.
- By 2025, millennials will be the highest earning generation in history
- Of those 90 million millennials, some 40 million of them would switch to a digital-only bank.
With that as a background, we decided to do something a little different at my company’s rebranded Bank Customer Experience Summit this past week in Chicago. We invited college students from the University of Chicago to share their thoughts on how they view today’s financial services environment, and the results in some ways surprised me.
What I want to do here is highlight some key thoughts from the eight students that joined us and provide some of my own analysis around what they said.
Apple Pay’s biggest rival is the little pouch you can put on that back of your phone [to carry your credit card].
I have to say, this particular student made a great point and it’s something I hadn’t thought about before. I see a lot of my friends with those combination wallet/phone cases that can fit your ID and a few payment cards. Why tap at the physical point of sale when you can use your card despite the slowdown with chip-card transactions? And multiple students noted that a plastic card works fine even with the EMV yips we have all experienced in the last year.
There’s little-to-no interest in using a mobile wallet because of security concerns.
This is something we’ve heard consumers say for the past couple of years. Even with security precautions like thumbprint authentication and tokenization, mobile wallets aren’t attractive enough to this group of college students. Some are more open to using a mobile wallet from their bank, but the idea of having sensitive payment information stored on their smartphone despite security precautions and liability rule doesn’t jibe with them.
Venmo is all the rage, but a couple of students question its security.
Yes, Venmo is as popular with this demographic as we’re told. It’s rare that these students carry cash and find Venmo easy to use. In fact, one student relayed a story about a smartphone-less friend who had to open a Venmo account online because it was the only way he could repay his friends. But despite Venmo’s popularity, a couple of students don’t use it because they don’t believe it’s safe. One student went as far to say that she knew Venmo employees that don’t use the P2P service over security concerns. You can make your own judgments about that statement.
Every single student banks with a major FI.
While this surprised me on the surface, it made more sense when you listen to the reasons. This demographic should despise big banks as a few saw their families struggle in the aftermath of the 2008 financial crisis. But each student loved the convenience a big bank offers. And with a Citibank on campus, that seems to be the preferred bank with students. At least one student had an account at two major banks. Again, they all appreciated the convenience large institutions offer. But…
They don’t feel loyal to those banks and would switch for better features.
Now, this was actually a point that I tweeted and it got me a little bit of heat on Twitter. We know how difficult it is to switch banks and the folks who responded to this tweet said that people talk a big game about switching banks, but never do it. See Bank Transfer Day in 2011 as an example. But when you’re a college student, is it really that difficult to switch banks when you don’t have to worry about issues such as direct deposit?
Alexa doesn’t impress them.
Even with all the recent talk about the Internet of Things, something like Amazon’s Alexa doesn’t appeal to this group because they’re not going to use new technology just because it’s present in a device. Most of the students didn’t favor such new technology because it takes away from the traditional buying experience.
Overall, this panel was an insightful. It’s one thing to read survey results about millennials’ opinions, but something altogether different to hear it from the horse’s mouth. One more key thought to keep in mind going forward is that these students don’t want to be talked down to when it comes to marketing. As one of them said, they expect conservative marketing from a financial institution, and to not refer to them as bae or some other silly term they might use among themselves.
In other words, keep it real.