The Millennial generation is beginning to saturate the retail banking customer base, and it shows no signs of slowing.
As these potential credit union members mull their options for long-term financial partners, it will pay to get to know these customers now.
Meet the Millennial
Also known as Generation Y, members of the Millennial generation were born between the late 1970s and early 2000s. They grew up in an age of technology and economic boom in the United States. Naturally, they’re very comfortable with communication technologies and virtual environments.
The Millennial Shift
Currently representing nearly one-third of American adults, according to the U.S. Census. Millennials are also called “Echo Boomers”—a nod to the generation’s comparable size to Baby Boomers.
By 2017, Millennials will have the most spending power of any generation. Today, they account for 9% of total transactions; within five years, it will be 40%. And by 2025, Millennials will make up 75% of the workforce and will surpass all other generations in total earnings.
The Entitlement Issue
Known for high expectations, Millennials demand flexibility, access and advanced technology in all aspects of their lives. In a 2010 study, Gen Y respondents scored 25% higher for levels of narcissism and entitlement than respondents aged 40 to 60, and 50% higher than those aged 61 and older.
The Tech Generation
The most tech-savvy generation yet, members of Gen Y expect technological conveniences. Compared to Boomers, Millennials are:
• 15% more likely to let financial institutions’ websites and online communities impact banking decisions; and
• 29% more likely to try new technology-enabled tools.
The Mobile Generation
Millennials are connected to their mobile devices. Of note, 31 percent of Gen Y reviews account balances more than eight times a month.5 Compared to Boomers, Millennials are:
• 8% more likely to use remote check deposit capture; and
• 33% more likely to use mobile banking functionality.
The Experience Counts
Millennials are driven by experiences, desiring consistency and efficiency in their interactions with financial institutions regardless of what channel they use. Despite their affinity for technology, Millennials aren’t refraining from using traditional channels.
They average 2.5 branch visits per month, and 59% say branch locations are important. Surprisingly, a Gen Y consumer is more likely to visit a branch, drive up to an ATM or use a call center than any other age segment.
However, this could be because Millennials aren’t getting what they need from their preferred digital self-service channels.
Source: “Leveraging Technology to Humanize Service,” a report from Diebold.