Millennials find established products, new tools for banking
Alex Langan, 34, uses a mobile app to transfer money, but the Hampden Township resident still likes going to the bank to deposit checks, withdraw cash and use his safe deposit box.
And his kids love getting lollipops.
Though banking technology has changed, banking products haven’t, whether it’s checking accounts or lollipops. The big change in financial services is how transactions are being made.
Banks have to move fast if they want to keep up with millennial banking customers.
Millennials want to bank quickly or they bypass it altogether. They want access to a local branch, but they don’t want to be limited to traditional branch hours.
Banks also have to keep an eye on a new crop of rivals: companies that utilize online platforms, mobile apps, virtual tellers and people-to-people payment apps like PayPal and Venmo.
To keep up, financial intuitions hire dedicated teams to focus on digital banking and craft competitive strategies, while smaller banks risk falling behind the times. Last year, the FDIC announced that eight banks closed. All but one had under $1 billion in assets. Many did not offer mobile banking.
For Luke Bernstein, chief communications officer at Orrstown Bank, it’s sink or swim.
“If you don’t have a mobile presence, I don’t see how you’re going to survive in today’s financial world,” Bernstein said.
Other banks, such as Centric Bank in Lower Paxton Township, have created millennial advisory boards.
Centric’s millennial customers use technology for everything. They do not carry cash, and instead pay people using people-to-people apps or via their mobile banking apps, according to Centric Bank’s senior vice president and chief retail officer, Leslie Meck.
“They do not hesitate. They just use the technology,” Meck said.
If it takes more than a few minutes to open an online account, millennials will most likely stop trying. The entire process needs to be completely digital from beginning to end, from signing to account funding, according to research by the Centric millennial board
Millennials also appreciate a helping hand — whether it comes from a live person or an online chat function — while sorting through financial tasks such as filling out a loan application.
That is where traditional banks may find they still have some leverage.
For more complex transactions such as mortgages or car loans, even millennials seem to prefer visiting a brick-and-mortar institution as opposed to handling those transactions solely online.
“Why not offer both?” said Jordan Space, Central Pennsylvania market president at S&T Bank, which is based in Indiana, Pa. “A mobile app is another connection point similar to online banking and the branch network. We feel that customers want options and that the mobile banking app is just another option.”
Orrstown is on the same page. The Shippensburg-based bank plans to build three new branches in Lancaster this year.
“A number of our customers feel comfort in having us there. That’s why we’re moving full steam ahead with our branch expansion,” Bernstein said.
“I think millennials are, in a lot of cases, informed consumers and when they have major transactions will ask very detailed and really intelligent questions about the full spectrum of what they’re looking to do. So whether it be a mortgage or a home equity line, they’re really coming in asking questions and doing a lot of the research,” Bernstein said.
Langan did his research when he purchased a commercial building in Camp Hill for his business, Langan Financial Group. The attorney chose to finance it through a local credit union that offered the most competitive rates. But rates were not the only factor. Ease of doing business was also crucial.
“They ensured the paperwork was properly completed and we had all the necessary documents. They consistently followed up with all parties involved and made the transaction relatively painless,” Langan said.
When it comes down to it, millennials want the same things people of every age want from a bank: efficiency, fair rates and a helping hand.
And Baby Boomers and Gen X’ers appear to be finding them in the same places as millennials.
Orrstown is seeing more and more people from every generation using its technology — the mobile platform, the online platform — and utilizing it effectively, Bernstein said.
It took Orrstown nearly 20 years to reach 20,000 online users. It only took the bank four years to reach 12,000 mobile users.
“Certainly more millennials are utilizing the mobile platforms that we have, but you’re seeing all generations utilizing the mobile platform,” Bernstein said.