The Intersection: Jul 2014

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Bank to the Future: Millennials are Driving Trends in Banking Services

by Justin Rouse

As a young kid, I remember the Saturday morning routine well – grocery shopping, hardware store and a trip to the local bank with my parents. We would see familiar faces there – maybe our neighbors, or maybe one of my elementary school teachers. The bank staff knew everyone and everyone knew them, their kids and what was going on in their lives. I always loved going to the bank, probably because I got a lollipop from the teller when we left.

These days, I am a more mobile bank customer, as are most of my millennial peers.

Earlier this year, TD Bank released the results of a survey on millennial (customers ages 18-34) banking habits and found some insightful, but predictable, information about how millennial customers bank:

  • 90% of respondents said they bank online or use mobile devices for bank services more frequently than they use a bank branch.
  • 57% of respondents said they are using mobile banking services more this year than last.
  • While 54% of millennials visited a bank branch for banking help, 62% said they go online to get banking advice or information.

The survey also included some more interesting findings about banking knowledge:

  • 49% of respondents see their parents as their primary influencers in shaping their banking and financial views.
  • 40% of respondents say they turn to parents and family as a source for financial information.
  • 69% of respondents had received no financial education lessons at all.

These trends toward the use of online banking services, which have been discussed in sources such as Business Insider and Bloomberg, are inspiring the banking industry to re-think the future of the bank branch and the services banks offer their customers. As a millennial customer, I can personally attest to how much I love the simplicity of depositing a check, transferring money between my accounts and managing my investments using my smartphone or tablet. Providing these services is essential to the future of any consumer-facing bank. Young customers want to be able to access their life (and in this case, their money) whenever and wherever they want; it is how we operate.

Providing these services is essential to the future of any consumer-facing bank. Young customers want to be able to access their life (and in this case, their money) whenever and wherever they want; it is how we operate.

Banks have caught on to this fact – access to and use of online banking is growing faster than use of the Internet generally – pointing to an increase in services available online, but also adoption of those services. However, what banks should be exploring now is how to provide more financial education tools online.

When I went to the bank as a kid, I remember that my parents had someone they could talk to about their mortgage, their investments, their savings and their budget. Their banker was someone they trusted who advised them on smart financial decision-making. However, since millennials visit physical branches less and less, they are also losing that connection to a trusted financial advisor who can provide those financial lessons that many of the respondents in the TD Bank survey said they have never received.

Addressing the need for financial literacy, especially at the age when most people are starting out on their own, needs to be a critical component of the online services offered by banks in the future. While some large banks have started to expand these efforts, banks should do more to ensure that they provide financial education in the places new customers – in this case, millennials – are doing their banking.

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Justin Rouse

Account Supervisor

202-772-6960 \ jrouse@voxglobal.com