19 November 2008

Banks seeking to capture customers of the 18-30-year-old ‘millennial generation’ may need to step up their efforts to reach them via higher-tech channels, according to a survey released by Microsoft.

Millennials have embraced digital technology early in their lives, and thus their technological expectations in interacting with service providers are high

James Van Dyke, Javelin Strategy & Research More than 1,600 banking millennials in the US, Canada, UK and Australia were questioned on their banking habits for the the Millennials in Banking Survey 2008, conducted for Microsoft by Javelin Strategy & Research. The survey found that millennials predominantly go online for most basic transactions with their banks, such as viewing account balances (74 per cent) or paying bills (70 per cent), although they still prefer to conduct complex transactions, such as opening a new account or loan applications, in person.

Of those who chose online as a primary channel, 15 per cent preferred talking to customer service representatives via instant messaging (IM). In particular, Canadian respondents showed twice the preference of others for IM when it came to activities such as receiving financial advice, opening a new account or applying for a loan. In addition, Australian millennials reported nearly double the preference of other respondents to receiving account alerts via text.

“In this difficult economic time, banks are understandably eager to attract and retain new customers, particularly the estimated 80 million tech-savvy millennials who have entered or are soon to enter the work force,” said Rich Feldmann, US banking industry solutions director at Microsoft. “This survey shows banks need to consider a wide variety of channels to reach these consumers, and ultimately drive seamless integration across the Web, branches and phone.”

“Millennials have embraced digital technology early in their lives, and thus their technological expectations in interacting with service providers are high,” said James Van Dyke, president of Javelin Strategy & Research and an expert on the banking industry. “Banks need to be very conscious of this when attracting or retaining millennials as customers, as they require more tech-forward, easy-to-use and interactive interfaces across channels.”

While the millennials’ views on aspects such as customer service and security mirrored most common customer preferences, they also valued the provider’s Web site, Web-based customer reviews, news articles and professional reviews when selecting a bank.

“It’s critical for banks to offer an easy-to-use, informative Web site, because millennials rank this as a key way to gather information about the institutions they want to do business with, and online service capabilities also remain a top quality Millennials seek from their providers,” said Van Dyke.

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