4 Minutes Read.
How to Create the Ideal Millennial Bank
Millennials, or 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. Thus, banks are 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. According to some studies, about 46 percent of banking customers rely exclusively on digital services instead of personally going to their banks.
Paradoxically, millennials still expect a high level of personal responsiveness from their banks. The difference now is that many desire easy access through digital channels such as social media or through mobile devices.
Now, the challenge for banks and other financial institutions is to take existing 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 deliver personalized services directly to the customer through mobile channels.
From the customer’s 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 developed using demographic profiles, customer behavior and other non-traditional indicators. However, security is still of critical importance.
Even though millennial customers are more willing to share personal information through digital channels, they have higher expectations for data security and transparency. 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.
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