#BankingOnMillennials

#BankingOnMillennials

Ask your favorite millennials how your bank can attract and retain them and their friends, both as bank employees and customers, and you will probably hear Rule #1: OMG, stop with the word “millennials.”

They “literally can’t even.”

The worn-out term for those born between 1980 and 1996 definitely rates a frowny-faced emoji in these days of iPhones and Amazon—to the point that one comedian joked that stamping someone as a “millennial” refers to “any young person you don’t like.”

Calling this fresh-faced, latte-sipping crew, representing one-third of today’s workforce, “millennials” also flies in the face of one of the greatest truths about this “fam” of friends: they are not one homogenous lot. They are individuals who each have their own “likes” that transcend their Facebook pages and Instagram posts, and they want to use their passions to change the world, they maintain.

This group has now surpassed the baby boomers as the nation’s largest living generation, according to the Pew Research Center, numbering more than 75 million in the U.S., so understanding and adapting to this growing demographic must be part of any sound strategic plan.

“Getting” what drives this key age group is vital to the success of your bank going forward. As Ron Geib, Chairman of the Board and CEO of Harleysville Bank in Montgomery County, says often, “A bank is only as good as its employees.” To build the best talent pipeline, you need to go to the best wellsites and keep the flow going.

“Millennials are essential for business growth in the future,” acknowledged Roberta Lohr, Marketing Director of Somerset Trust Company, based in Southwestern Pennsylvania.

PACB’s Chairman Fred Henrich, President and CEO of Coatesville Savings Bank, pointed out that these young people will not only be our “bread-and-butter customers,” but our future business men and women and future political leaders. “Strategically, if we are to remain relevant 5, 10, 15, 20 years down the road, we will, as an industry, have to respond to this challenge now and build systems, processes and products that satisfy their special type of wants and needs.”

Technology has transformed America’s teens and twenty-somethings into masters of all things digital. They crave speed, convenience and social responsibility. They ask Siri for directions instead of looking at a map, put up Instagram pictures instead of photo albums, read Twitter or Buzzfeed instead of a newspaper, consult online reviews instead of their neighbors, and Google everything instead of going to the library or Encyclopedia Brittanica.

Brendan McGill, President of Harleysville Bank, has gained a goldmine of intellectual capital about what Generations X, Y and Z want by chatting with the young people in his bank’s focus group.

The bank brought together eight team members, aged 18 to 29, to gauge how the bank can help millennials become happier customers. They met once in July and will meet at least two more times. One of the first things they learned: young workers loved having a say.

“I was excited by the feedback, and they were excited to be asked,” McGill said.

Secondly, younger workers don’t like being marketed to. They want information but cringe at shameless plugs, over-the-top advertising or “hard-sell” pitches.

They love watching catchy “how-to” videos online, so they may eagerly click on a short video about how to be a first-time homebuyer, what they need to know about getting a student loan, or the ABCs of setting up a budget. Videos that are short, entertaining and funny, with maybe a concise lesson at the end, seem to be “the thing” to reach the newest generation of customers.

As a result of the feedback, McGill and his bank are also considering an “ask a banker” online chat feature.

Young people also Google everything, so the information must be at their fingertips for them to find.

“They know the information is out there. We have to put it out there so they can get it,” McGill said.

The bank’s website has more traffic than the LA Freeway, because kids engage in so much online banking, their mobile app is as popular as a Taylor Swift concert.

“Our bank is working hard to meet their needs and to create the way they want to bank,” McGill said.

“We are not trying to force them to bank the way we want them to; it’s the other way around,” he added.

The focus group said they think the bank’s app is excellent and professionally done, and the bank was reassured to know that they are offering all the services young people seem to need.

Next, the focus group will brainstorm steps to continue to improve the apps and other bank offerings.

McGill himself has five kids, ages 19, 18, 16, 15, 12. “I have my own focus group right around my dinner table,” he joked.

Even within the younger generation, preferences are changing faster than The Bachelorette’s love interests. The older ones had Facebook but have bypassed it already for Instagram and Snapchat. The younger kids never even had Facebook. It’s just not cool anymore.

With his daughter now a college sophomore, he noted that finances on college campuses remain a big hurdle for young people–and banks. The “big banks” may be situated directly on college campuses, but if community banks invest in attracting kids as customers at a young age, we can keep them as college students, McGill firmly believes. The bank tries to make it easy for a mom or dad to transfer money to their college coed when he needs to make those giant textbook purchases each semester, for example, or when they run out of cafeteria credits.

Kids also are heavy users of Venmo, which bills itself as a “free digital wallet that lets you make and share payments with friends.” When young people go out to eat as a group or Uber home after a night on the town, one person pays with his ATM card, and the others transfer money to the payer by Venmo, making the person-to-person transfer of money so easy and important.

The bank also wants to make it stress-free for young people to transfer money by email. “Our website is able to do that,” McGill emphasized.

He noted that many young people are not as focused on savings because they are still burdened with student debt, but they welcome a savings plan at the bank when they join as a team member.

Many teens and twenty-somethings often have little experience managing money, McGill said. They rarely ever use cash or checks. They love debit cards and online bill pay and taking a picture of a check and sending it virtually for deposit. If they fail to set up direct deposit, say for a short-term job, or their grandmother sends them a check for their birthday, that paper check is like a vexing foreign language to them.

Word of mouth is also not as critical to the younger generation as a whole. Online reviews have taken the place of the conversation at the grocery store or the mall. Young people love reading about what other people their age think, McGill said.

McGill also learned from the focus group that traditional giveaways, like potato chip bag clips or pencils, aren’t that “lit” either. Millennials would rather have cell phone pockets to hold their college IDs or ATM cards.

Kids thirst for the instantaneous and “They want to do it the way they want to do it,” McGill said.

They also want to be able to open an account online. They don’t want to have to come into a bank at all, hoping instead for “start-to-finish” banking.

“I went in (to the focus group) with a mindset of listening,” McGill said.

“They tell us what they want and we have to adjust. There are a lot of choices out there,” so banks must adapt like the latest apps to become the best choice for them.

Young People Making Change

Over the course of centuries, young people have always carried the banner for transformation, and led the rebellion against the status quo. Shakespeare applauded the “rose of youth” and the “salad days” when we were so young and green. From even the hippie days of the 60s, young people have always been motivated to push boundaries, think differently, and scowl at accepted standards.

FDR in the 1920s extolled youth as well, saying, “You are working out your own salvation. You are more in love with life; you play with fire openly while we did in secret, and few of you are burned.”

Robert Kennedy, in a 1964 commencement address, said, “I think it is fair to describe yours as a generation of unusually genuine and intense concern with social justice and intellectual freedom.” Today, young people may be more Big Bang theory than Brady Bunch, but that statement would be something today’s kids would still be retweeting.

Still, today’s baby boomers seem to regard the Gen X, Y and Z-ers with a cocktail of incredulity and admiration. They love that young folks can download an app for them or fix their temperamental computer, but lament that they are tethered to their iPhones and serve up selfies, duckfaces and Snapchat stories like a Kardashian. This generation has never known a world without the internet, emoticons, eHarmony, GoFundMe, and TBTs.

Stereotypes still linger as millennials fight the perception that they job-hop, feel entitled, and live with their parents. On the plus side, they are also regarded as more socially conscious and politically independent.

Millennials by the Numbers

According to FORBES Magazine, millennials will represent 46% of the total workforce by 2020. Like it or not, they are critical to the success and sustainability of your business. If they don’t want to work for you, your organization won’t work.

Forbes, in its 2015 article entitled “Why Millennials Don’t Want to Work for You,” found simply that “Millennials don’t want jobs. They want lives.”

Instead of focusing on milking whatever you can get out of the greener generation workforce before they move on in 1.5 to 3 years, organizations themselves are being blamed for Gen Y and Z and their short stints in businesses, the article said.

The younger generation doesn’t seem to want to sit behind a desk all day, every day. With technology at the ready, they can and want to work anytime and anywhere. To stem that revolving door of talent from crashing your business model, experts encourage leaders to create an entrepreneurial culture, where they satisfy the Gen X, Y and Z’s desire to be their own boss.

That usually means young people can work when, where and how they like, as long as they are delivering results.

With current technology, work and life can indeed bleed into each other seamlessly.

And striving to attract more business than the co-worker in the cubicle next to you is usually poor motivation. Studies show that 88% of millennials prefer to collaborate instead of compete with each other.

The new workforce is interested in working together to make the world a better place. An organization that truly embraces and lives the “one-team” spirit is destined to attract and retain Gen X, Y and Z. They must know how the work they are being asked to do is having a positive impact on the world. This is what will excite the next-generation workforce.

It’s not about making money; it’s about making the world a better place, experts say. 64% of millennials say it’s a priority for them, Louis Efron writes in the Forbes article.

According to Efron, (Dec. 13, 2015), “The next generation workforce is not interested in work. They are not lazy. They don’t think the world owes them a living. They want more out of life and want to leave the world a better place because they lived. If skilled and trained leaders and managers effectively communicate and align organizational and employee purpose, focus on outcomes not office hours, sincerely care about the life success of their people, plus pull employees together through shared purpose, then organizations will experience greater employee and customer engagement, less short-tenured turnover, and greater business success.”

With so many articles like the Forbes one, millennials have become one of the most documented and over-analyzed generations in history, thanks to the social media that has come to dominate their lives.

Their financial lives have not escaped scrutiny either. A study by the student loan company Navient and Ipsos revealed that 60 percent of millennials borrowed to pay for college. But they also pay off those loans: 44 percent of people over 30 who borrowed for college are debt-free. (Washington Post, Aug. 20, 2017).
Ninety-three percent of young adults are saving for a goal. Those aged 22 to 35 are saving, but not much. Most are saving for short-term goals, like a vacation. Only one in three young workers under the age of 35 is saving for retirement, according to the Navient survey.

But they are bringing home weighty paychecks.

The median salary for millennials with advanced degrees is $95,000. The median salary for workers aged 28 to 35 is $72,500.

Navient also found that 24 percent of people age 25 to 30 with a college degree have a mortgage. People assume student debt and low-paying jobs make it hard for young people to move out of mom’s house and buy a house of their own, but that may not be the case.

From the Mouths of Millennials

Audrey Rattay is a millennial working as Assistant Vice President and Director of Marketing at Farmers National Bank of Emlenton.

If she could summarize millennials in one sentence, Rattay said, “Millennials are the perfect combination of traditional values mixed with modern ambition.” We know where we came from and what we stand for – we have set high goals and expectations and are not afraid to do what it takes to get there!”

She believes the biggest myth about millennials is that, “We want nothing to do with face-to-face communication. It is a myth because we are the complete opposite – we thrive on ‘personal touch.’ We want people to know our names (think LinkedIn, writing our names on our cups at Starbucks, building our social empires, etc.), we still believe in shaking hands and meeting for coffee and even though everything is ultimately available online or mobile, we don’t stray away from networking/social interactions.”

Her thoughts echo the Forbes findings.

“Millennials in the workforce want to feel included and bring people together. Our bank has developed and brought new life to wellness programs, training opportunities, employee gathering, the “suggestion box”, etc. and truly has done a great job at being open to new ideas for overall workplace immersion,” Rattay said.

To accommodate millennials as customers, Rattay said, “Our bank has added an advanced online and mobile platform to complement our ‘art of the handshake was never lost’ brand on which we were founded. Adding mobile deposit to our mobile app, easy ways to pay friends and family back through online bill pay and an updated website/brand image are just a few adjustments made.”

“It is very interesting to watch how our community bank is changing. Technological advancements are allowing us to put a new spin on traditional practices, employee engagement is rising and millennial customers are not afraid to offer suggestions or feedback,” Rattay said.

Bankers with a lifetime of experience in the field are in line with that take. John Coleman, President and CEO of Tioga Savings Bank had a Temple University student design his website and get him on Facebook as part of a whole new business model. Customers from New Jersey and beyond are finding them through Facebook.

G. Henry Cook of Somerset Trust Company challenges millennials to scare him with their ideas, and they have risen to the challenge. He demands innovation and out of the box thinking from them, and if they think too tamely, he sends them back to the drawing board.

Henrich sees the biggest myth about millennials is that they will somehow change when they “grow up,” “That can’t and won’t happen because of the environment they’ve been exposed to. Everything is technology-driven. That certainly won’t change and go back to the way it used to be done.”

In an industry that is slow to change, driven by young people who want change instantaneously, “It creates a whole different kind of cultural struggle,” he said.

If we can get daughter, mother and grandmother—and son, father, grandfather—to buy the same brand, that’s a win, many experts say.

Roberta Lohr of Somerset Trust Company has a wonderful vantage point on the younger set.

“The biggest myth about millennials is that they do not work hard. They do work. They just work differently. They are involved, active and passionate about work and play,” said Lohr.

“Somerset Trust Company has adjusted well to millennials in the work force. They provide a vitality and energy that helps us build for the future. We give them the freedom to determine where they fit into the organization and help them find the best place to utilize their talents to help make our bank be the best community bank we can be,” Lohr said.

“Somerset Trust is in the process of attracting more millennial customers. With the help of our millennial staff, we are building services and products such as a mobile platform and a more relevant online presence,” Lohr said.

Millennials have injected additional energy into the workforce, Lohr said, as they have “helped redefine how we open new accounts, how we can more creatively engage with our communities, and how we can be more efficient in our internal processes.”

“Millennials at our bank bring out a new energy and outlook for long-time bankers, like me,” Lohr said.

“We are learning new ways to present information to customers, and the efficiencies of a digital world. However, we also realize that nothing can replace the personal service of a teller in convenient branches and a person, not a computer voice, on a phone call. We have expanded our branch network, as well as business hours and our People First Call Center,” Lohr continued.

“An example of the power and uniqueness of millennials in our bank is their ability to recognize trends and quickly react to building events around them.”

Lohr said, when Pokémon was popular, her younger staff organized an impromptu Pokémon party in front of the main office. It was promoted on social media only for about three days prior to the event.

“Over 150 people attended, some from communities about 20 miles away!” Lohr said.

That fun-loving free spirit is what we all need to tap into. Who knows what the high schoolers of today will embrace?

Forget that running joke about “Life is what happens while you are staring at your phone.” These Gen X, Y and Z-ers are reinventing life, and the banks are following them.