According to a study, the number of millennials in USA alone is more than 84 million. This is the same generation, which has witnessed the beginning of a digital era.
However, the banking habits of millennials are a bit different than the previous generation. This is quite natural as the generation Y always tends to follow alternative and different practices for banking.
Here are a few common trends, which the millennials try to follow when it comes to banking.
Banking in Digital Age
Due to the fact that millennials are a generation, born in the digital era, they are prone to invent some new and innovative ways to conduct their banking works. According to a report of 2015, the generation performs their basic banking actions by using the digital channels, compared to the previous generations. Another important aspect of the millennials is that, all these activities like, checking the bank accounts or cash transfers are conducted by using a mobile device. Approximately 65% of the millennials conduct their internal fund transfers through the digital channels.
Choosing the Small Banks over the Big Ones
One of the things which millennials are more prone to avoid is the biggest banking industries. A three years research has revealed the fact that most of the people belonging to the Generation Y, tend to avoid the big banking sectors like- Bank of America. Due to this situation, community banks are becoming the main gainers. Community banks are trying to capture these millennials by providing the best digital services, mobile banking and an amazing customer service.
Dependency on the Mobiles
Most of the millennials have voted for using their mobile devices to conduct their bank dealings. 75% people of the above mentioned generation rely on their mobile phones, whether it is for staying active on the social media platforms or for conducting some important work. The importance of mobiles has increased to a great extent as some banking applications can actually be performed well by using a cellphone
Alternative Financial Services
This is one of the most popular trends in the financial world, which is gaining its importance. The peer to peer lending process has paved the way for the millennials to lend the required money from one another. The main reason behind the popularity of this service is that, here one can get a higher return and the risks are also very low. In this scheme, the borrowers can enjoy more freedom in obtaining a favorable rate for their loans. On the other hand, this opportunity cannot be availed by the traditional users of banking services. However, one thing is clear that, millennials belong to that group of people, who have a strong desire of controlling their financial issues by themselves.
Creating a Fund for the Future
When it comes to banking or savings, the most important trade of the Generation Y can never be denied. The generation has been more interested in creating a fund for their future than indulging in unnecessary expenditures. The Fidelity survey has found out that, over the half of the millennials of the United States have already started to save for their retirement. This habit has the capability of securing the unknown future of the above mentioned generation. This is indeed a huge change, not only in the activities of the millennials but the overall change in their thinking can easily be noticed.
Mindset of the Millennials
Most of the millennials have been born and brought up in a surrounding, where there is no signs of trust on the banking industry can be found. Thus, a shift can easily be noticed, when it comes to the banking habits of millennials. This distrust is the main reason for the millennials to avoid all kinds of exposure to the banking industry. The generation is more eager to go to the bank very often and if possible resolve every single problem by giving a call to the branch or by dropping a mail. The business model of the banks are changing fast due to the mindset of the mindset of the generation Y.
Nowadays, many millennials have become distrustful towards all the financial sectors. But, all the hope has not been lost. The banks should try to understand the demands and expectations of this generation for making some changes in their policies. Banks can think about working in a different way, while delivering a consumer planning:-
- By limiting the consumer choice, banks can help the consumer to take a quick decision.
- The banks could also think about providing a proper guidance to the consumers.
- Using relevant data can also work as a turning event for the banks.
However, this is the proper time for the financial hubs to alter their policies for regaining the trusts of the millennials. This is very much essential for the banks as after a few years, the necessity of a bank will definitely go through a huge change.