4 Minutes Read.
How to Create the Ideal Millennial Bank
“Millennials,” the generation born between 1980 and 2000, are an economic force of almost unimaginable strength. They are the largest generation in American history, and by 2022 will make up more than 40 percent of the country’s workforce. They already account for $1.3 trillion in buying power annually.
And their financial power will last far into the future. According to data from the American Bankers Association (ABA), 86 percent of millennials are disciplined monthly savers, and over the next 30 to 40 years, they will inherit $30 trillion – about 35 percent of the today’s total household net worth – from their parents’ generation.
Millennial banking represents a huge opportunity for the industry, but there is a problem: The same ABA report notes that 71 percent of millennials would rather visit the dentist than go to the bank because they don’t believe the latter offers anything unique.
To overcome this skepticism, banks are changing the way they do business. Millennials want digital tools to help them manage their money and build their wealth. Banks are responding by turning to Fintech solutions to provide the customer experience millennials are looking for.
The ideal millennial bank is one that doesn’t follow the old “omnichannel” gold standard for user experience, but one that serves “omnidigital” customers. About 46 percent of banking customers, according to some studies, do not interact with their banks at all using physical communications channels – visiting a branch, or calling customer service – but rely exclusively on digital tools.
Paradoxically, however, millennials still expect a high level of personal responsiveness from their banks. The difference now is that it must flow through channels they consider familiar and efficient – social media engagement and in-app features they can easily access through their mobile devices.
The challenge for banks and other financial institutions is to take all of their traditional products and services – which are all things millennials still want – and recreate them in a form that caters to millennial lifestyles and sensibilities.
The Digital Lending Opportunity
Digital lending is a major component of the millennial banking product and service mix. The right digital lending solution can help your institution expand its market by delivering personalized services right to the customer through mobile channels, wherever he or she is.
From the customer point of view, everything from making the application, to monitoring its status, to receiving and spending the funds can be managed from a well-designed app. From the point of view of your business, automated lending software solutions can greatly increase the speed and efficiency of your processes.
AI-driven digital lending solutions also broaden your customer reach by allowing secure credit assessments beyond conventional credit scoring.
Read more about advantages of artificial intelligence in digital lending here: Digital Lending and Artificial Intelligence.
Credit profiles can be built up and expanded through demographic profiles, customer behavior and other non-traditional indicators. Security is still of critical importance, however.
Even though millennial customers are more willing to share personal information over digital channels, they have high expectations of data security and transparency in how their information is used. MonJa offers an unbeatable software solution for consumer and business loan underwriting and can help you tap the lucrative millennial market. To learn more about what digital lending solutions can do for your business, download this free e-book today.
Request MonJa's Loan Underwriting Demo
Our platform supports consumer term, C&I, CRE, auto and other small business loans.