November 13, 2017
How banks can attract millennials away from fringe alternatives
Millennials (18-36) are the most likely to turn to alternative financial services, notably person-to-person payments like Venmo but also high-fee services like check-cashing and short-term lending.
Here are three ways banks can attract millennials by encouraging them to improve their financial situation:
- 1. Lower Barriers to Entry – Millennials carry record amounts of student loan debt. “No fees for the first year” of a savings or checking account might be very attractive to someone just out of college.
- 2. Incentives & Rewards – Not being rewarded for their business is a common millennial complaint. Banks can offer ongoing rewards like reimbursing ATM fees or immediate incentives like a free personal finance consultation with a new account.
- 3. Yes, A Mobile App – Three out of four millennials say they would benefit from a Personal Financial Management app. Their top wants: 1) Track spending; 2) plan a budget; and 3) maximize savings.
Overall, the challenge for banks is to build trust with millennials. The best way they can do that is to make it easier for them to use and understand mainstream banking services.