Millennial business decision-makers want to bank differently. Of course they do — Millennials are a generation that defies convention. They want to do everything differently. This spirit of breaking the mold is particularly felt in the arena of commercial banking.
Because Millennials are mobile-first and often think traditional banking methods are outdated, they have a whole new set of expectations and habits the commercial banking industry needs to adjust to – especially since Millennials are also the fastest growing generation of business banking decision makers.
So what does the commercial banking industry need to know in order to respond effectively to their vastly different needs of the Millennial customer?
In partnership with Bottomline Technologies, The Center for Generational Kinetics conducted a National Study on Millennials and Business Banking and this is what we learned:
- Millennial business-banking decision makers still count on banks as a critical component to success. In fact, 83% of Millennial business decision-makers believe that the right banking relationship can make or break their success. That’s great news, but it’s countered by some pretty bad news: 53% are using non-bank providers (often more than one) for core banking services.
Businesses are simply not getting what they need from their business banking relationship – and they’re paying an average of $10,000 a month to get it elsewhere. That’s a huge missed opportunity for banks.
- Companies are actively looking for the right banking partner. 66% of Millennial business decision-makers are actively on the lookout for a bank that can provide a larger variety of business services and tools (despite the fact that 56% would rather get a cavity filled than switch their bank accounts). Their main objective is to simplify. Using multiple partners to fulfill a variety of banking needs, such as forecasting, managing cash flow, issuing invoices and managing accounts receivable, is making banking far too complex and distracts from the core nature of their business.
Banks who can simplify the lives of Millennial decision-makers will stand out from the crowd when the time comes to choose a new banking partner.
- Banks can be that right partner if they can adapt.
Today’s business banking decision-makers don’t want much — just a simpler relationship with their commercial bank. Three key areas stood out as needing the most improvement with financial institutions as they exist today: Consolidating and simplifying financial tools; improving cash flow automation; and providing a fully-integrated view of their cash position.
Businesses want their bank or credit union to be a one-stop resource for actionable insights into the important business operating metrics they need to make good decisions. They want an advisor who can help them run their businesses effectively, not a cold institution mired in rigid policies and procedures.
To take advantage of the Millennial opportunity, banks need to adapt to a new breed of business banking decision-makers — a generation that expects a consumer ease-of-use experience with their commercial banking relationship, where opening a new business bank account is as easy and straightforward as joining Netflix. This will require a significant shift in mindset for financial institutions, but it’s an adaptation that’s required for the changing times, and one that will offer significant returns for institutions that are successful. In short, banks can win Millennial business banking customers, but only if they adapt to think like this new generation of mobile-first customers.
Are you a Millennial with some money in the bank? Join the conversation on Twitter at @JasonDorsey or @WhatTheGen and don’t forget to add your #generation!