Today nearly everything has become virtual. People spend less time with each other face-to-face and instead choose to isolate themselves behind their computer screen or mobile device. Millennials make up a large portion of this introverted census. From a business standpoint, this can be detrimental. Without in-person contact in business transactions, firms like Bank of America and Wells Fargo, are beginning to close down their physical branches to make the transition to online banking to appeal to this generation. Online banking ranges from mobile check deposits to bank statements available online. These two large banks have already made the transition by creating customer apps and online platforms.
But the problem continues for how the banking industry can appeal to millennials. Companies such as Robinhood have already figured out a way to appeal to this generation by the utilization of their mobile investment app. Last year, I downloaded the Robinhood app and it has streamlined my banking and investment process. Like most other millennials, I use the Internet to research which companies I should invest in.
Banks that have not yet made the transition are seeing a decline in their customer base. Those that have, such as Wells Fargo and Bank of America, are able to capture large portions of market share from competition. But how are big banks grabbing and keeping the attention of millennials?
Online Investment Applications
I fall into the 18-25 year old range, putting me smack-dab in the middle of the millennial age group. Who wants to spend time going to a broker to find out which companies to invest in? Not me! As a matter of fact, 36% of millennials like myself prefer to do online banking as opposed to walking into a branch to sort out their banking needs. Online banking has become the norm — and so have investment apps. Companies like Robinhood, Loyal3, Acorns, and Stash are all free investment apps that are used mostly by millennials to automate the investment process. I currently use Robinhood, which sends me notifications on how well my stocks are doing. This way I can research and check in on my investments at my convenience. My mobile device is my own personal bank, and for the introverted, on-the-go millennial audience, mobile apps are exactly what’s needed.
Bank Branches And… Millennials?
For millennials, 36% of banking is done onsite at a bank, 58% is done either through a mobile app or online, and the final 6% is done over the phone. Because millennials feel more distrust towards others, they tend to do things on their own and rely less on others to help them out. This is why us millennials are considered the most “stubborn economic optimists” who would prefer to look up information on our mobile devices on our own rather than talk to a bank representative or industry professional. Even though 36% of millennials go to branches to sort out their financials, this number is declining day by day, and soon physical branches will be a thing of the past.
As a way to appeal to millennials, banks are making drastic changes to keep up with this generation’s need for technology-based services. Hard currency is becoming less and less popular, while digitized currency, such as Bitcoin, presents an alternative to standardized national currencies. Typically enterprise companies like Wells Fargo and Bank of America are focused on their applications for their customers. They are making large investments in software and hardware in order to keep their customers happy when banking online. This generation puts all of their trust into technology, as I can attest. If banks don’t make the change soon, then they will lose a large customer base and decrease their market share. Again, who wants to spend time driving to a branch when they can easily bank with their fingertips?
Effects Of Not Transitioning
Not only does using online banking save time, it also saves money. Depositing money online saves banks money rather than employing a teller at a branch to do it for you. It’s actually up to 20 times cheaper! And although investing in virtualization is nowhere close to being cheap, it is a way to woo the millennial generation. According to Business Insider, banks will soon lose relationships with their customer base if they don’t make the transition over to digital banking. Although there are around 20 million people that still use branches, experts believe that the branches will become the new “phone book.” The world is becoming digital in every aspect of life and falling behind in this digitizing process is a death wish. So, what should banks do to appeal to millennials? MAKE THE TRANSITION.
Ty Randell – Content Creator