Millennials and Banking
This tech-savvy generation is already changing the way people bank, and as Millennials’ online banking presence continues to grow, so does the need for innovative and user-friendly technology. It is more vital today than ever to stay ahead of the technology curve, prompting Credit Unions to invest into these technologies now to ensure they meet the demands of their future members.
Reaching a Younger Generation Means Changing Priorities
Millennials will soon make up the largest share of the labor market, projected to reach 75% of the global workforce by 2025. They’re set to reach their prime earning potential in just a few short years. Financial institutions who aren’t working to reach this generation now may not have another chance to secure their business.
Credit Unions have historically relied on strong community ties to bring in Baby Boomers and Gen-X members. But Millennials’ relationship with finances and banking is different than previous generations’. They care more about accessibility, instant access, and digital self-service.
According to 2018 FIS PACE Report, 88% of Millennials bank. While that number seems high, there are still many opportunities for Credit Unions to gain Millennials’ trust and secure younger Millennials’ business who haven’t yet entered the workforce. However, reaching this younger audience means Credit Unions must position their services to appeal to what Millennials want from a banking institution.
Meeting Member Expectations
What do Millennials want from their Credit Unions? Today’s members expect smaller institutions to offer features previously available only to larger banks, like digital self-service. These features are increasingly important to younger generations like Millennials, who are more comfortable accessing services from their smart devices than visiting a physical branch.
In contrast, a large percentage of Credit Unions have failed to adopt digital technology, or are doing so very slowly. With the growing need to appeal to younger generations, larger national banks who do invest have a significant advantage over those who don’t. Credit Unions must work hard to close that gap before it’s too late.
The Rise in Mobile Banking Increases the Risk of Fraud
One area Credit Unions should target is fraud protection. According to the same 2018 FIS PACE Report, 94% of consumers do their banking online, with Millennials leading the charge. That number will only continue to grow: 42% of Credit Union consumers in 2018 reported using their bank’s mobile app more than they did a year ago.
But as the number of members who bank online continues to grow, so does the risk of fraud. Though most people report confidence in their Credit Union’s securities, the risk of them leaving after a breach is high: 1 out of 4 consumers who experienced fraud have switched or plan to switch to another credit union or bank.
Protect Your Next Generation of Bankers with Upgraded Fraud Protection
Properly protecting your members against online fraud attacks requires more than adding additional – and inconvenient – online authentication requirements. Doing this will just further frustrate your members. But since Credit Unions are at high risk for fraud, a solution that covers both ends of the spectrum is required.
Arvato’s Fraud Protection offering is an account protection solution that uses Behavioral Biometrics to identify users. As it builds a biometric profile through passive user analysis, the protection solution recognizes users and offers real-time fraud detection. Credit Unions increasing their digital banking services can leverage this solution to provide their members with best-in-class protection. Your Credit Union can also secure first-adopter status, allowing you to offer a service most other banking institutions do not.
Positioning yourself as an innovative institution that prioritizes digital security, customer safety, and ease of use will go a long way in appealing to Millennials. After all, younger generations who may bank exclusively online want to ensure their financial partners are protecting them. Reach the next generation of bankers and strengthen existing members’ trust by upgrading the way you protect your members’ accounts.