The traditional financial services sector in Australia and New Zealand has had it good for a long time. Research from F5 Networks shows that a considerable number of people–around 40%–have never switched banks. But with the oldest of the millennial generation now in their 30s and earning substantial salaries, that could all be about to change.
Millennials’ expectations about money, the financial institutions they use, and where they get their financial information from is vastly different from their mainly Baby Boomer and some Generation X parents. For example, a report by Facebook, in partnership with Accenture, found millennials are increasingly using more than one bank. On the youngest millennial end, about 45% of 18-year-olds hold banking products with more than one institution. That figure climbs to 64% of 25-year-olds.
The report, “Connecting with Millennials–How Financial Services can create meaningful connections with Millennial consumers,” also found traditional media channels used by banks to reach their customers are not holding millennials’ attention. While a significant proportion (about 65%) of millennials use social channels on a daily basis, only 32% watch free-to-air TV, just 6% read a print newspaper, and a scant 4% read print magazines.
This means communicating your brand through old media to reach millennials is an increasingly shaky proposition. So what can financial services marketers do about it?
Taking On The Millennial Challenge
The traditional banking sector is aware of the rise of millennials and doesn’t want to get caught flat-footed by the entrance of fintechs and digital-only banks. According to John Arnott, financial services industry lead at Facebook ANZ, 20% of millennials either have a relationship with a fintech or would be willing to move part of their banking relationship to one.
“Millennials value brands that are not only safe and offer value for money, but also those that make their lives easier and give them the tools and experiences to best reach their financial goals,” Arnott told CMO.com.
Westpac New Zealand acknowledges the shift in the market. To remain relevant, the bank is developing new products and bolstering its innovation pipeline, according to Jo Bailey, customer relationship marketing manager at Westpac NZ. And to do that, it is shifting to an agile operating model. “In December 2018, Westpac NZ moved 800 of its staff to form customer-centric tribes and truly cross-functional squads,” Bailey explained.
The goal is to provide a banking experience that fits in with millennial consumers’ mobile lifestyles and to increase the percentage of business they can carry out online. The bank has also prioritised being faster to market and enabling consumers to provide direct feedback. “This allows us to deliver [product and service] improvements continuously and incrementally,” Bailey said.
Suncorp Group has also been making changes, with a pivot to digital and artificial intelligence to provide the services millennials want. Kristeen McCarthy, head of digital experience and activation at Suncorp, pointed to the introduction of an intelligent virtual assistant “to answer help questions on our AAMI [insurance brand] help-centre pages” as one way the organisation is meeting millennials.
This chatbot has so far responded to 10,000 queries, using a conversational style that injects fun and humour. “This allows people who prefer to self-serve to get answers 24/7 on the Web and mobile,” she said.
Resonating With Millennials
With millennial consumers focused on social media and new forms of entertainment, including streaming video, the onus is on financial services marketers to provide engaging, relatable content that speaks to their needs.
McCarthy noted that blog-style content resonates with customers on the company’s AAMI Answers pages, adding that video is another key area the company is exploring. “Video content is a growing area of focus providing [that] content is easily consumed and related to the context of customers’ digital media usage,” she said.
The company’s focus on new ways of delivering content echoes the findings of the Facebook/Accenture report. When advertising is played on a TV channel, barely one-third of millennials said they paid attention, while half switched their attention to their smartphones.
This trend towards second-screening provides an opportunity for marketers, who can target content at millennials on social and mobile apps during traditional programming breaks.
“Millennials are more likely to research and make decisions about financial products via digital channels,” Arnott said. “They are also much more likely to make a purchase if the mobile experience is simple and intuitive.”
In the end, it comes down to this: The old ways of doing things won’t cut it with millennials, who value ease of use and flexibility, as well as responsiveness, over the traditional financial services model.
“The ability to switch between different banking experiences is here to stay,” McCarthy said. “This impacts not just millennials but any customer who has a propensity to use digital. I run five different accounts myself now because they all have different features, and I can move funds between them instantly.”