What Causes Profitability?

August 12, 2014
/   Spotlight

Digital Insight proves that digital bankers actually drive increase engagement and profitability with their financial institution.

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...

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

/   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...

Platform Shift in the Making

February 13, 2013
/   Insights

What does the banking industry as a whole have to do with Amazon, Microsoft and Apple? Just about nothing—and down the road, it may turn into a major problem (if it isn’t already). Consider...

Infographic: How to Spot a Fake Check

March 8, 2013
/   Insights

The team over at TROY pulled together an infographic on how to spot a fraudulent check. With more consumers using remote deposit capture to upload and deposit checks through their smartphones, it’s important to...

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...

Financial Literacy Month: How are you celebrating?

March 22, 2013
/   Insights

With April approaching, it’s almost time to kick off Financial Literacy Month! Strongly supported by the United States Congress and the Financial Literacy and Education Commission, Financial Literacy Month aims to promote the importance...

Reserve Banking: The New Radical Idea

June 5, 2014
/   Insights

Banking is by nature a very conservative industry. That’s why the current buzz over ‘reserve banking’ is so interesting. Even the term seems innocuous, but the scenario it proposes is nothing short of revolutionary....

Kids today—they don’t know much, but they think they know everything.

That’s the familiar yet only appropriate reaction to the latest deep dive into millennial behavior as it pertains to banking. This one comes from “The Millennial | Financial Behaviors & Needs,” a comprehensive new study commissioned by TD Bank and conducted by Angus Reid Public Opinion. The study samples 2,031 millennials aged 18-34, all of whom have some form of financial relationships.

In what might not be a big surprise, a significant majority of the respondents, 69%, have never taken part in any financial courses, seminars or workshops. But apparently that isn’t a big problem—fully 59% of those surveyed say they’re extremely, very or somewhat knowledgeable about day-to-day banking. And here’s a nugget that will confirm some more stereotypes about this generation.  When they actually do go search for information, nearly half cite parental influence for their opinions in this area, and 40% turn to family for specific advice. Of course, a strong 62% also go online to find answers.

To be sure, none of the findings in the TD Bank is particularly surprising. They do more banking online than in-branch; nearly half favor mobile access, and the numbers keep rising; and so on. Each generation carries with it a level of stereotypes, and this one is no exception. And of course, as with most stereotypes, there is more complexity than is first apparent, and that emerges with more detailed research.

It’s easy to shrug off these studies, but to do that would be a mistake. Negative perceptions aside, millennials do bring real change. And for our industry to survive, let alone thrive, we must do things very differently.

Millennials are the reason why a retail giant like Costco is facing some very real problems. The company is still frequently celebrated in customer service surveys and documentaries alike, but concerns are rising that the membership and bulk-goods business models don’t appeal to younger consumers. That may be one reason why the stock is suffering.

Costco is facing issues in generating and retaining millenial-aged members.

On a related note (since the Costco model is so dependent on customers having cars), the auto industry—which is still in recovery mode after a rough few years and government bailouts for some—is getting worried that those pesky millennials don’t seem to want cars as much as their predecessors did? Is it because, in this economic climate, they just can’t afford to buy what they want? The car makers certainly hope so, but the fact that an alarming number of teenagers haven’t even bothered get a driving license should be cause for concern. Is it because the wealth of social media tools and channels make it less necessary to meet face to face? Is it because in the age of Big Data, these tech-savvy and privileged consumers won’t respond to marketing unless it’s much more customized?

And as even a scan of the headlines will make clear, millennials are the reason why President Obama appeared on a far-outside-the-mainstream outlet like “Between Two Ferns” to pitch his signature legislation, the healthcare law. Critics have savaged the appearance as being beneath the office of the President, but the undeniable truth is that the stunt generated enormous attention and drove unprecedented traffic to the primary healthcare site.

In a sense, we’re not that different from giant retailers, carmakers and the Presidency. We need to get our message out there in order for our customers to come to us. We don’t have to change our identity or our philosophy in the process, just certain strategies and a lot of tactics. But the bottom line is that in appealing to millennials, if we’re not doing things differently, we’re probably doing things wrong.

 

 

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Brad Strothkamp

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

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.

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.

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.