You may have wondered if people are banking online depending on their age. We seldom think about generational changes when it comes to certain matters like banking. However, the fact is the millennial generation is more connected digitally than any prior generation. Pew Research Group recently published information about which age group makes up the Millennial generation, specifically those who were born between 1981 and 1996 (ages 23 to 38 in 2019) is considered a Millennial. This may not seem particularly important but there are several reasons why defining this unique group of individuals is crucial to marketing and ensuring their needs are being met. One of the characteristics of this generation is they typically prefer banking online. Here are 5 reasons millennials prefer banking online versus a traditional brick and mortar bank.
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5 Reasons Millenials Are Banking Online
1. Millennials are More Tech Savvy
The generation dubbed as millennials grew up in a time where computers and smartphones were more affordable, readily available, and in most cases, where their household had internet access. Therefore, millennials are more likely to expect to obtain services via their computers or smartphones than prior generations. Banks that can offer this service to millennials are the ones who will do the best.
2. Some Millennials Have Never Written Checks
Because of the advent of free online checking accounts and online bill paying, there are a substantial number of millennials who have never written a physical check. This is a generation accustomed to working on their smartphones or computers to deal with their “finances” as numerous studies have shown. Because millennials prefer to not take the time to write a check, there is a good likelihood they will be using online bill pay, automatic withdrawals for bills, and other instant payment methods.
3. Online Bank Communication Options Suit Millennials
Most millennials prefer their banks communicate with them electronically either through text messages or emails. Typical brick and mortar banks require telephone calls or person-to-person visits in order to communicate issues about an account. When banking online, fraud alerts, account alerts, banking statements and more are handled electronically. Online banks typically have a live chat feature available for customers, statements are readily available online with a mere click of the mouse and account alerts can be set for a variety of needs including low balance alerts.
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4. Accessibility Matters for Millennials
Some studies show that millennials are more likely to want to have access to their accounts through their smartphones and computers. In fact, one study shows that millennials access online accounts three times more than prior generations. Given the ease with which an online checking account or savings account can be opened, this is no surprise. Since online banks are less likely to offer an account with no opening deposit, they are more attractive to millennials who may not have the same level of savings their parents or grandparents did in prior generations.
While millennials may turn to an ATM occasionally for cash, the fact is most of them prefer mobile payment options whether they are shopping online, or they are out for dinner and a movie with friends. Millennials are also more likely to transfer funds to friends or family members using online banking resources than prior generations.
5. Educational Resources and Other Online Access
While millennials still prefer to not seek out banks with a brick and mortar presence, they do still like the idea of getting educational materials from their bank. While this may seem like a bit of a dichotomy, the fact is most millennials feel banks have an obligation to provide some level of financial education. Information about finding the right bank, low or no-cost bank accounts, and banks that allow options to open an account with no opening deposit have a vested interesting in making sure millennials have access to the information they need to identify the best bank accounts to suit their needs.
Millennials are tech-savvy and understand the risks associated with banking online but in most cases, they feel secure with most online banking because, for many of them, this is the world they grew up in and one where they feel they have the most control over their finances.
We are living in a time where more of us have less time to get day-to-day errands taken care of thanks to the demands of careers, friends, and family. Time spent banking, paying bills, and depositing funds to a brick-and-mortar institution can take up more of our free time than we are willing to sacrifice. Millennials seem to have conquered that time crunch by depending more on the availability of free online checking accounts and automation to deal with bills and other payments.
Banking Online Trends: Conclusion
Everyone has different reasons for turning to online banking relationships versus the more traditional local bank. Online banking offers the right amount of preferred communication methods, education and other perks which make them more attractive to the millennial generation.