The financial services industry is increasingly focused on winning Millennial customers, but most firms still fail to deliver an experience that will resonate with the generation, according to a study released by Corporate Insight.
According to the study, banks, brokerages, credit card issuers, insurers and retirement plan providers are all changing fundamental aspects of their marketing, products and service models “to capitalize on the Millennial opportunity.”
At a high level, Millennials put a substantially higher rating on the importance of financial education from their bank, retirement plan provider and brokerage firm compared with older generations. Further, the study finds that Millennials are the generation most likely to interact with their providers exclusively via a mobile app rather than through a website alone.
One common misconception, the research warns, is that Millennial’s willingness to embrace technology means they are automatically disinterested in traditional high-touch service from advisers, banks, credit card companies, etc. Overall, half of Millennial investors say they prefer to rely on the guidance of a broker or adviser rather than trusting their own investing decisions, for example.
“To succeed with Millennials, firms must recognize and respond to their need for financial education and guidance, and their demand for mobile account access,” says James McGovern, vice president of consulting services at Corporate Insight. “Flexible pricing and products, a socially conscious corporate philosophy, and all-around transparency are also important elements of an effective Millennial-focused value proposition.”
NEXT: Learning from other providers
The research suggests different providers across industry channels can learn from the others’ approaches to meeting the needs/preferences of Millennial clients. For example, banks stand out because they “continue to invest heavily in their mobile experience, recognizing that this is the key channel for engaging Millennials.” Credit card issuers, on the other hand, are finding success integrating credit scores, spending analysis and other capabilities into their digital offerings to target younger consumers.
“Property and casualty insurers are experimenting with new product design and pricing strategies to accommodate Millennials' preferences and budgets,” the research explains. “Life insurers are offering simplified, digital applications to make it easier for Millennials to purchase policies.”
In the wealth management and defined contribution investing domains, Corporate Insight anticipates continued momentum for low-cost digital advice offerings that “connect with Millennials and defend [providers] against fin-tech startups targeting them.”
“DC plan providers have made significant improvements to their mobile offerings but may be missing the mark by focusing on mobile-optimized and responsive designed sites rather than native apps,” the research warns.
Information on obtaining Corporate Insight research, including “Millennials Revisited: Financial Services and the Digital Generation,” is available here.
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