cut to the chase: The financial services industry is rapidly changing to
satisfy its new best friend, millennials. There’s no getting around it; their
sheer numbers necessitate attention. Millennials represent one in three Americans in the
workforce, 25 percent of the global population
(fun fact: there are more millennials in China than people in the United
States!), and have $200 billion in buying power. They
are the largest single generation in the workforce today. And, most
importantly for financial services, they are 43 percent of all mobile banking
and finance usage.
Indeed, millennials don’t value
traditional banking like previous generations. Born into a digitally-connected
era, they heavily rely on the Internet and smartphones to conduct their
business, including managing their finances. According to research from Gemalto, more than
one in four (27%) millennials have never even visited a bank branch.
Comparatively, 77 percent use online services
every month and many consider mobile banking “essential,” with nearly 40
percent reporting that financial apps help them control their finances. This
becomes critically important in maintaining trust. Since they’ve never
been to a branch, there are no people, no relationships to build loyalty.
All trust, loyalty and affinity for the brand comes 100% from experience on the
web and via mobile apps. Any breach here, and trust is broken…forever.
And, it’s worth noting,
financial help. Millennials grew up during the global financial crisis, so
managing debt responsibly and avoiding risk is very important to them. A
TD Bank survey designed to understand these
young adults’ banking behaviors found that “while 59 percent of millennials
reported that they are ‘extremely’ or ‘very’ knowledgeable about their
day-to-day banking products like checking accounts, they still want advice on
personal finance topics,” including savings, credit cards and creating a
In other words,
millennials value tools and advice that give them control over debt and credit
alike—which helps explain their reliance on fintech over traditional banks for
financial advice and things like debt consolidation loans. In fact, millennials
are driving a surge in personal loans, 36 percent of which are from
All these statistics
converge to make one key point: While there is a huge opportunity for
fintech providers to capture market share and growth, there is also sizable
risk. Why? Because data security is top of mind for these so-called
“digital natives.” They understand the liabilities of trusting organizations,
like financial institutions, with their online data and expect that it will be
well guarded 24/7 with no lapses.
If it isn’t?
say goodbye to your millennial customer base; millennials are 2.5 times more likely to change
banks than their older counterparts if they aren’t pleased. And one surefire
way to keep them happy is with a secure mobile and/or online customer
experience. After all, the number one tool millennials want is
better mobile security for financial transactions.
Don’t risk losing the
most connected, powerful consumer demographic because of lax security. The
guaranteed fallout—customer attrition, reputation loss and more—simply isn’t
worth the risk. Proactively securing a secure customer experience
is paramount to maintaining a competitive advantage and capturing the trust of
your most important customers.
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