Why Millennials are Essential for the Sustainability of Community Banks?
Community banks have a customer base that is primarily comprised of Baby Boomers and Generation Xers. Over 57% of customers at community banks are over the age of 50. As a result, community banks have relied heavily on the income generated from the generation of baby boomers but for reasons such as retirement and mortality, the revenue generated from the baby boomers will soon start to diminish. As the baby boomers retire, the millennials will begin to dominate much of the American workforce and where these millennials choose to bank would make a world of a difference in the banking sector.
The graph shows the difference between the median age of the average American and the median age of Americans who bank at community banks.
So, unless community banks can figure out a way to attract millennials, they are quite likely to go bust in the coming years. It is high time that Community bankers start focusing on ways to attract more millennials. Millennials already make up for over a quarter of the US population and they are on their way to reaching their prime earning age.
Are community banks equipped to engage millennials?
Community banks maybe great at building interpersonal connections with their customers and providing fabulous customer service for the community but they can still do a lot more when it comes to leveraging digital technology to enhance the user experience for the customers which is what the millennials are looking for in a bank.
How community banks can attract millennials?
Millennials are a generation that came of age in the digital era. Many of them have probably never even written a check. As much as they would enjoy the personal connection that community banks have to offer, millennials would also expect a wide variety of digital services and enhanced user experience via web media and mobile, areas where the big banks excel at.
Millennials are also a group of people who would be interested in knowing that banking at a community bank helps the local businesses and supports the local economy.
Here are 4 Ways to make community banks more attractive to Millennials:
Mobile App Development
Most community banks today have some form of mobile application, but they do not always have the best in user experience or functionalities. Upgrading mobile apps to bring out the best in user experience for the customer while also providing improved functionalities is crucial for attracting more millennials.
- Millennials are 3x more likely to use mobile banking
- Visits to bank branches are down 30% since 2017
- Use of Mobile banking app is up 33% since 2016
- Over 92% of American millennials own a smartphone
According to Mark Riddle, director of research at BAI, over 50% of Millennial customers would be willing to switch to another bank if they found out it offered a mobile app that was much better than the one they were currently using.
A lot of millennial customers today are not comfortable with sharing their personal financial information with members of the staff, especially details related to their salary, personal debt and mortgage payments. An AI enabled chatbot gives the users their privacy while solving their queries over the web.
Chatbots have gathered a lot of momentum recently in the banking industry. It gives the banks the ability to resolve customer issues in record time. Modern AI enabled chatbots can give community banks an edge over its competitors.
Providing Better User Experience (UX)
User Experience is all about providing an overall pleasant experience for the user by means of designing a website and mobile app that offers the best in accessibility and ease of use for the user. Research suggests that a user will leave a poorly designed website in under 10 seconds. A well-designed UX would encourage a user to interact with the content on the website bringing them one step closer to becoming a customer. A website is often the first touch point between a prospective millennial customer and a community bank and having a website with a well-designed UX leaves a positive impact on the user, increasing the odds of a user opening an account with the community bank.
Website Performance Optimization
Research suggests that Internet users today leave a website if it takes longer than 3 seconds to load and this is even more applicable with the millennial generation today. Webpages that have a slow loading time can easily turn away potential customers.
SEO optimization is another key component that plays a part in website optimization. SEO plays a pivotal role in boosting the organic discovery of a community bank. Most millennials today look online when they need to find a banking partner and it is quite crucial for the community bank to rank on top with the other bigger banks to stand a chance at winning the millennial customers over.
Contact us to find out more about how your community bank can better appeal to the millennial generation