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Millennials and banks: digital, social and personal

The millennial-inspired digital revolution is here, but don’t shutter brick-and-mortar bank branches just yet.

Millennials may never have stepped inside a bank to check on balances, transfer money or get their passbook stamped, but they still value personal interaction at a branch as a key part of their customer experience. Millennials also choose banks based on their social media presence, their social responsibility, interest rates on their products and, of course, their entire array of digital services.

According to the J.D. Power 2017 U.S. Retail Banking Satisfaction Study, millennial customers, while highly attuned to digital banking channels, still place a high importance on visiting a bank branch, especially for transactions such a loans.

“There is no question that banks need to get the digital experience right in order to attract and retain customers. However, the branch continues to play an important part of the overall customer experience,” said Jim Miller, senior director of banking at J.D. Power, a California-based global market research company.

“The trend is particularly noteworthy among millennials, who represent the future of banking and consistently demonstrate that overall satisfaction is higher among customers who use both the branch and mobile banking.”

Despite widespread reliance on digital channels, 71 percent of all bank customers visited the branch an average of 14 times over the past year, the J.D. Power study said. Among millennials, 71 percent used a branch, averaging 11 visits in the past year.

“Banks can’t choose between the two channels; rather, they must focus on how the two work together,” Miller said.


It’s difficult to say that all millennials – those born from the 1980s through the early 2000s – will behave a certain way or have the same needs, said Kevin Schmidt, president and CEO of The Neffs National Bank, Neffs.

“Some millennials indicate they want personal interaction at a bank while others indicate that they want to do all their banking through their phone,” he said.

“Some indicate that they want to retire early and are looking to prioritize their savings and wealth, while others may have incurred substantial student loan debt and will need to put off saving until they have their credit commitments under control.”

There’s a general consensus that millennials are tech savvy and live by use of their mobile phone and new, different social media, Schmidt said. He noted that Neffs provides services that will appeal to young customers by offering a range of mobile-friendly services, including internet banking, remote deposit and a phone-friendly website.


A main challenge with millennials is accurately identifying and fulfilling their needs at the appropriate stage of their life, said Klyda Hutchins, senior vice president and regional manager for Provident Bank, where millennials represent about 24 percent of the customer base.

“Since all banks essentially offer the same products and services, we strive to improve and differentiate our digital delivery channels to meet the needs of millennials,” said Hutchins, based in Flemington, N.J.

Provident has expanded and enhanced its social media and digital outreach, key drivers for communicating the bank’s message to millennials.

“We’re also looking at expanding video and mobile strategies when targeting millennials,” Hutchins said. “Digital is preferred by millennials for routine banking transactions. However, for more sophisticated financial needs such as purchasing a home, investing and financial planning, millennials prefer personal interaction and individualized attention.”


Millennial customers don’t judge a bank solely on its digital capabilities.

“Millennials are engaged socially and place value on a financial institution that is socially responsible and committed to helping the communities it serves,” Hutchins said.

“They also judge banks on their financial stability and their reputation for delivering sound financial advice.”


Another challenge for banks trying to attract and retain millennial customers is loyalty, said Jim Gillen, vice president of strategic planning and business development director at ESSA Bank & Trust, which is based in Stroudsburg.

“Millennials don’t seem to be as loyal as other generations might be,” he said. “This is interesting because most younger millennials aren’t a profitable customer base at this point.”

Many banks target millennials hoping that as they mature, buy a home and settle down, they’ll remain with that same bank, he noted.

“They are the future, and listening to their needs is vital,” Gillen said. “Having a sound digital plan, preparing solid content and providing advice at various life stage moments will help create the credibility needed to sustain a long-lasting relationship.”


A full range of digital services is at the top of the bank shopping list, and, as consumers, millennials are more willing to bank solely online and forego the branch experience.

“But for this concession, they want to see higher rewards such as higher rates on their checking and savings accounts, and ATM fee refunds,” Gillen said.

Schmidt agreed, saying that Neffs, like most banks, must remain competitive with rates and fees and continue to update electronic banking services to keep pace with technology.

“Other challenges center on marketing to them and how and where to reach them, as there are some indicators that they value personal referrals more than targeted ads,” he said.


While a bank’s digital services are paramount for millennials, they also consider more traditional attributes in making decisions.

For example, many young millennials bank where their parents bank, and some believe strongly in local ownership or local involvement in community endeavors, said Miller of J.D. Power.

“Digital transactions and quick-and-easy access are must-haves, but so is the need for some timely interaction with professionals,” he said.

“In this regard, I would say millennials are like any other generation. For life milestones, they want and need good advice.”

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