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/   Insights

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/   Spotlight

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/   Insights

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/   Insights

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/   Spotlight

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/   Insights

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/   Insights

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What We’re Reading

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/   Spotlight

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/   Insights

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What We’re Reading: Thanksgiving Edition

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/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Coming of age during the last recession and being subjected to the barrage of headlines about financial executives misbehaving, many Millennials are distrustful of established financial brands and institutions. According to the Millennial Disruption Index, a 3 year study of approximately 10,000 respondents, 71% of Millennials would rather visit the dentist than listen to what banks are saying. And, all four of the leading banks in the U.S. are in the bottom 10 of the least loved brands by Millennials.

Source: The Millennial Disruption Index. Viacom Media Networks.

 Wharton FinTech, the first student led FinTech initiative, has published two white papers on Millennials’ relationship with banks (June 2015 and May 2016). Their findings suggest that there are three key areas of focus that will help earn the trust of and retain Millennial members.

Technology, with an emphasis on Mobile. Millennials trust technology for their financial transactions more than any previous generation. Transactions that in the past involved human interaction have moved online completely. Restaurant bills are split using p2p payment apps, savings are managed by robo advisors and student loans are applied for on mobile devices. Having grown up in the app ecosystem, Mobile has become the central hub of Millennials’ lives. 75% of U.S. Millennials are at least somewhat reliant on mobile banking to manage their accounts, and 27% completely rely on it. Banks who capture market share amongst Millennials will be those who develop applications prioritizing the Mobile experience.

Millennials’ heavy dependence on their mobile devices is matched by their high expectations for user experience. There is a general sentiment amongst Millennials that banking applications can be improved. According to SNL Financial, 53% of Millennials see their mobile banking applications lacking. 54% of that group say that they would switch providers if the alternative offered better applications. For Millennials, user experience is key to earning their long term business. Banking apps should operate seamlessly, design should be attractive and security should be a given.

Prioritizing key life moments. Millennials make financial decisions based on need, which are shaped by life moments. Life moments can be large or small – from choosing a college to deciding whether a new pair of shoes fits within a budget. Wharton FinTech’s May 2016 white paper indicated that the top three life moments for Millennials are planning a vacation, finding a new job and daily shopping and budgeting. Deciding on a college / furthering studies was most important for younger Millennials (18-21).

Banks have the data to identify when these moments likely are. For instance, younger Millennials may be worried about their tuition for the next year. Those entering the workforce are more likely worried about paying their bills on time. With large installed customer bases and their data, banks are in an excellent position to provide Millennials guidance when making important financial decisions. Using existing data and ongoing surveys to predict when customers may be going through life moments, banks can precisely target Millennials when they need guidance. Successfully doing so will build trust and loyalty over time. FinTech lender SoFi made life moments a key part of their business model. They offer career services to their student loan borrowers, strengthening the relationship with members and earning their trust for future financial products.

Social marketing to remake bank brands. Millennials are more interconnected than any generation before them and rely heavily on their social networks to influence purchasing decisions. Bank marketers can leverage social media as a powerful channel to target life moments. Additionally, they should craft their brand image around ideas that Millennials care about and thus are more likely to share.

Social media’s importance as a marketing channel is widely accepted. The message being shared is equally as important. Millennials care about social causes and avidly share initiatives on social media. 90% of consumers would switch brands to one associated with a social or environmental cause (2015 Cone Communications / Ebiquity Global CSR Study). Some larger banks already lace their marketing with social / environmental causes (TDBank does a good job here). However, it takes company-wide buy in of a social mission to change a bank’s brand in the eyes of Millennials, who highly value authenticity.

Min Fang is the cofounder of Harper Partners, which provides working capital funding to digital media, advertising, technology and many other types of businesses. Prior to Harper Partners, Min was a private equity investor at Angelo, Gordon & Co. and also worked at Bank of America Merrill Lynch where he advised consumer and retail companies on M&A and capital raising transactions. Min is a member of and regular contributor to Wharton FinTech.


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp