Banks Must Get Digitally Savvier, Report Says

Banks must up their digital street cred with a younger audience if they want to attract the millennial generation to use their services, according to a new report from BBVA.

Online banking and mobile apps aren’t enough to attract the digital-first audience, the study said, which referenced the “more nuanced, personal services from new fintech disruptors” as reasons banks need to tap into a younger mindset for its product offerings. BBVA Compass economist Marcial Nava told FineExtra that that 75 million Americans that make up the most educated, tech-savvy population — which includes millennials — can not be overlooked.

“A vast number of young adults demand banks to engage in the kind of relationship that helps them not only to access credit but to navigate the intricacy of their financial life cycle. If banks do not embrace these changes, non-banks will,” Nava said.

Because those in the age bracket of 18-34 are likely to have the most debt and lack the ability to access large lines of credit, they don’t usually have as many assets to banks so they are often overlooked. But with new competition coming into the financial services scene — peer-to-peer lending, crowdfunding, payment platforms and virtual currencies — the report said that banks should review what they can offer the digitally-driven group. This means engaging more with customers, seeking direct feedback and employing more young people, the report said.

BBVA Compass — a U.S. financial holding company — took on the model itself when it shelled out $117 million for the startup Simple, a company that focuses on providing young consumers mobile-based money management solutions. Nava said for banks to keep up with the innovative nature of the more modern digital-first financial companies they must establish teams to address the younger population of consumers.