Key trends in person-to-person payments

July 11, 2016
/   Insights

The emergence of new technology solutions in the past few years has affected almost every aspect of the financial sector, but one area where this is making a real difference is in the person-to-person...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

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/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com 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

http://www.forrester.com/rb/analyst/brad_strothkamp