In the age of computers and high-speed internet, many experts are quick to announce that going digital is the key to any business’s survival. After all, Millennials and Generation Z grew up with the technologies that we now all use daily: desktop computers, laptops, smartphones, and even tablets.
Indeed, many giants in the finance industry believe that these younger groups prefer conducting their banking transactions in front of a machine and the comfort of their own homes. By contrast, these same groups also dislike having to head to a physical branch and talk to a clerk face-to-face. In short, these audiences expect instant gratification and will not settle for anything less—that is, anything that will take more than a few taps or clicks.
With all of this in mind, the strategy that banks should take seems clear as day. Put simply: to attract these tech-savvy audiences, financial institutions must start rolling out as many digital channels as possible. At the same time, they should invest considerable time and effort into optimizing their retail banking software.
But amid such digital transformation, is it possible that companies have made false assumptions about what these generations actually want? To be specific, what if Millennials’ banking habits mirror those of their parents more closely than initially thought? Let’s take a closer look at just a few of the similarities between Millennials and Baby Boomers when it comes to their banking habits and preferences:
What They Know About Financial Services
When it comes to financial know-how, Millennials are believed to be better informed than their parents thanks to having grown up with easy access to the Internet. Given this, it may seem odd that there are still many, many things that Millennials don’t know about financial services. For instance, one relevant study found that roughly 40 percent of Millennials are not aware if their bank of choice can provide them with person-to-person payments, compared to approximately 50 percent of Baby Boomers.
Their Use of Online Banking Services
As previously mentioned, a common belief is that older generations prefer to bank in person, while younger generations gravitate toward online banking applications. However, the numbers show that there isn’t as stark of a difference as initially thought.
When it comes to paying bills, nearly 50 percent of Baby Boomers used mobile banking, trailing only slightly behind Millennials, about 60 percent of whom used mobile banking for their bills. Additionally, approximately 50 percent of Millennials and Baby Boomers have used mobile banking services to transfer money.
In terms of frequency, many companies believe that Millennials spend much more time on online banking than their parents. However, one study shows that a whopping 70 percent of Baby Boomers do their banking online at least once every week. These statistics fly in the face of how this generation is commonly thought to be averse to using digital channels.
Their Adoption of New Technologies
The numbers above come as less of a shock when you consider that both generations eagerly embraced the early adoption of new technologies during their time. For instance, Baby Boomers witnessed the transformation of the telephone from a bulky and unaffordable gadget to a much more portable and inexpensive device. Even as they’ve grown older, they’ve come to welcome certain conveniences such as email, with over 90 percent of Baby Boomers using it every day.
Meanwhile, most Millennials are digital natives who’ve become accustomed to communicating with others through the World Wide Web. As such, it’s little wonder why this generation has a preference for texting and messaging others through online applications.
Because of growing up in the age of the Internet, it’s hardly any surprise that over 90 percent of Millennials own smartphones, according to a study by the Pew Research Center. But their parents aren’t that far behind, with that same study stating that nearly 70 percent of Baby Boomers also own smartphones. Additionally, over 50 percent of Millennials and Baby Boomers reported that they owned tablets, and a little over 70 percent of both generations are subscribed to home broadband services. Lastly, almost 100 percent of Millennials and 85 percent of Baby Boomers said that they regularly use the Internet.
Given both generations’ propensity to adapt to the latest technologies, banks may want to reconsider putting all of their efforts into winning over only their younger, supposedly more tech-savvy customers. Instead, they may want to shift gears and start including Baby Boomers in their digital transformation plans moving forward.
How Likely They Are to Switch Services
In recent years, Baby Boomers have gained a reputation for demanding only the best quality of service from the businesses that they patronize—to a fault. In fact, according to one cross-generational survey on customer experience, nearly 50 percent of Baby Boomers would switch companies as a result of even a single negative experience.
Though Millennials are seen as much more patient and empathetic when it comes to customer experiences, they’re not actually as brand loyal as certain experts may claim. In fact, another study found that over 60 percent of Millennials wouldn’t hesitate to abandon their current bank for one that could provide them with improved online banking services.
What They Do When They Encounter Issues with Their Bank
Speaking of customer experiences, Baby Boomers and Millennials have the same approach when they run into any problems with their bank’s products or services. For comparison’s sake, the same aforementioned customer experience survey found that Generation Z customers are more likely to try and solve the issue on their own before reaching out to a company for help. Meanwhile, this same study found that Baby Boomers and Millennials will reach for the phone and call the bank immediately rather than waste their time searching online for a solution.
Despite being in vastly different stages of their lives, all these findings show that Baby Boomers and Millennials share a lot of overlap regarding their banking preferences and behaviors. Thus, it is up to financial institutions to more closely analyze the data and determine where the differences and similarities occur. Only in this way can they serve each generation in the best way possible.