Connected by new technologies, disconnected from the housing market, and accustomed to getting answers fast – the UK’s millennials live in a different world to previous generations.
And as a result, they have a new set of needs, goals and expectations – especially when it comes to financial services.
But to win the business of millennials across the UK, today’s banks don’t just need to transform to meet their demands. They need to beat a host of nimble young competitors and tech giants to the punch, and seize back the initiative in terms of service delivery and customer-centric innovation.
In recent years, a series of reports have highlighted just how poorly served many UK millennials feel by the range of products offered by their banks.
If that’s the case, what do millennials actually want from their financial services providers?
One clear answer emerges: a little more help. The uSwitch report cited above suggests millennials are keen to receive advice and information on:
Our own report into the banking habits of US millennials recently highlighted a number of other priorities – ones that seem likely to hold true on this side of the pond.
First off, millennials say they’re much more reliant on mobile banking services than older generations – over twice as reliant as baby boomers.
Second, millennials want more real-time communication with banks, and they want it on their own terms. Nearly half of millennials want to receive SMS alerts from their banks, and 69% of those who engage their banks via social channels expect a response within the hour.
As we’ve seen, millennials have a set of demands – around service, products, and information – that many don’t feel are being met.
Which begs the question: if millennials aren’t getting what they want from their existing banks, where are they getting it?
Who millennials are looking to… for financial advice
UK millennials are used to gathering advice from their peers. Research conducted by Inkling suggests 72% of UK millennials look to friends and families for recommendations when making general purchase decisions.
This strong reliance on personal networks also applies when it comes to money matters. Indeed, UK millennials are twice as likely to ask their parents for financial advice than they are to ask their bank.
Who millennials are looking to… for financial services.
When millennials take their finance questions to families and friends, banks miss out on an invaluable chance to differentiate their offering and drive engagement.
But when millennials take their business elsewhere, banks miss out full stop.
From current-account-only propositions like Starling, to full-service, mobile-only providers like Atom, the variety of services available to millennials is on the rise. And there’s evidence to suggest such fresh options – whether provided by young finance start-ups or established technology giants – can be very attractive to the digitally-savvy generation.
As uSwitch’s Nicholas Frankcom explains:
“The banks must work harder, with more innovation around relevant products and services if they are to attract the custom of this generation. If they don’t, someone else will – our research already shows that tech giants like Google, Apple and Amazon are emerging as credible alternatives for younger consumers.”
For most established banks, responding to millennial expectations requires a more conscious and consistent effort. But those that are rising to the challenge are reaping the benefits – successfully differentiating their service, gaining new efficiencies, and taking the fight to the competition.
Meeting the demand for real-time banking
One bank that’s taken powerful positive steps to meet changing customer demands is Al Rayan Bank (ARB). As COO Mohammed Gamil explains:
“In the UK’s competitive banking sector, you have to use the latest and most innovative technologies to attract and retain customers.”
In keeping with this ethos, the bank has developed a cashiering app to speed customer service, and ensure balances are always up to date.
ARB customers can open an account through the bank’s website (which is powered by the Salesforce Platform) in just 15 minutes, while central logging of customer queries helps its staff give rapid responses on any service case.
Meeting the demand for SMS alerts
Another bank that’s meeting millennials on their own terms is the Bank of Cyprus – not least with its balance-by-SMS service.
The bank decided to launch the service after insights from Service Cloud revealed eight out of ten calls to its customer service team were balance enquires. As Jonathan Wood, Head of Systems, explains, offering customers an SMS-based service had a rapid, dramatic impact:
Owning technological change
Barclays may be over 325 years old (that’s older than the United States of America) but it’s looking to the future, and working to own the technological change that’s giving rise to so many new competitors.
Recent tech-powered initiatives have seen the bank cut the time it takes to get a tailored mortgage quote from hours to minutes. As Barclays’ CEO of Mortgages explains:
“We have two choices. We can be a laggard, and we will be Uber-ized out of the world. Or we can be, as Barclays typically has, at the forefront of this technology revolution, and we can respond. That’s much more fun.”
‘Millennial’ may be a broad label, but when it comes to banking, it’s a valid one – representing a swathe of the UK population with a demonstrably different set of needs, values and expectations to others.
As competition for their business hots up, today’s most forward-thinking banks are working to serve faster and smarter, and own the digital disruption.
Dive deeper into these insights with a complimentary copy of this Special Report: What Millennials Expect from Their Banks