There’s no question that the influence of millennials has transformed banking as we know it. And, the increasingly digital demands of this generation are forcing banks to keep up or lose out. But is the Millennial influence really all it’s cracked up to be? Urban FT co-founder and CMO Mark Kilpatrick joined Karen Webster to discuss where Millennials may be leading the future of banking.
Millennials want what they want, when they want it.
And they have the digital means and tech savviness to get there faster than some sectors are able to deliver.
It’s clear millennials and their tech-heavy influence have contributed to many industries making the decision to speed towards digital. But in the world of digital banking, is it really a race worth winning?
Long story short … it is.
It’s really no surprise millennials opt for digital banking apps more than their Gen X and baby boomer counterparts – it’s comfortable for them.
Growing up in this digital era has left millennials with an ease and familiarity with technology unlike previous generations.
Look no further than services like Venmo and Square Cash to see how comfortable and easy it is for millennials to take nontraditional routes to access the financial services they need and want, Mark Kilpatrick, co-founder and CMO of Urban FT, explained.
Kilpatrick contributed this openness to the type of relationship millennials have developed with banks.
“When you look at the baby boomers and the Gen Xers, they really value that branch relationship and that experience they have when they walk into the branch,” he explained,
“But today that relationship, I think in particular with millennials, is becoming more transactional and less transaction based.”
It comes down to this: Why would someone do something over the phone or in-person that they could just as easily accomplish with a few taps on their mobile device?
It’s no wonder millennials are often found to be more engaged and involved with the technology that they’re using compared to older generations.
For them, technology isn’t something to be as weary of because it’s something they’ve been surrounded by for so long.
Though most people don’t like having to actually go inside a branch location to handle their banking business these days, you’d be hard pressed to find a millennial next to you in line.
For baby boomers and Gen Xers, who may have riskier or more complex financial needs than their digital native counterparts, going into the branch probably isn’t as big of a deal.
But Kilpatrick noted that these older generations also have a greater desire to keep their financial information tied up and locked down, meaning they may see using a digital channel as an unsecure option.
Millennials, however, find comfort in taking the fast, simple and oftentimes digital approach to handling their finances and seem perfectly comfortable sharing sensitive or private information with trusted sources. Perhaps this is because they haven’t accumulated significant assets, so they’re less at risk.
It’s not as if digital banking, such as mobile apps and online account portals, suddenly sprung up when millennials came of age to use them.
The services have been around for years, but the increasing adoption by millennials – especially compared to older generations – might be what has banks driving forward with advancing technologies to keep pace with evolving digital expectations.
But there’s a challenge in creating a digital banking experience that both satisfies the fast-moving, comfortable millennials as well as the skeptical, slower-paced baby boomers and Gen Xers.
Kilpatrick said that striking the balance comes down to accessibility and education around digital banking.
Non-millennials need to understand what the application or technology does, that help is available if assistance is needed, and that they are able to perform the same transactions digitally as they would in person.
In addition, non-millennials need assurance about digital security, such as biometric authentication to help them feel confident their data is protected.
It’s about delivering comfort and security to those who have trepidations about digital banking.
As millennials continue to expect more capabilities and convenience from the digital tools they use to manage their finances, it’s up to the banks to deliver.
“They’ve grown up with so many applications that do things so well and are designed to fit their lifestyle, so they expect to be able to pick up their mobile device and do what they need to do with their money,” Kilpatrick explained.
There’s a comfort in knowing they don’t have to make a phone call or go to a branch in order to accomplish their financial tasks, he added.
The desire for this comfort could be what will drive the digital banking experience forward in both the near and extended future.
In many cases the future is already here.
From wearables to contactless payments, voice recognition to mobile wallets, the digital banking landscape has no shortage of innovation.
However, the true test may just be how well these technologies are actually received as millennials continue to push the banking ecosystem toward the digital channels they desire.
“It will be interesting to see the adoption, what specific innovations are adopted, and who can really build ubiquity to make it a really open experience for everybody,” Kilpatrick said.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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