It's hard to deny that big cities offer the lion's share of opportunity. But for millennials, the appeal of moving to a booming metropolis has begun to wane. As the oldest millennials – now in their mid-to-late-30s – reach career stability and gravitate toward marriage, parenthood and in some cases home ownership, they're rethinking whether major U.S. cities are where they want to live. In 2018, several news outlets reported that large segments of this demographic are opting instead for more affordable areas.
That's good news for banks and credit unions in mid-size cities, suburbs and small towns. With this demographic approaching its peak earning years as the largest segment of the U.S. workforce, this shift could help boost local economies.
But millennials hold certain expectations of financial institutions. Big cities are chock full of media-savvy brands and on-demand digital services. To compete, banks and credit unions in small cities and suburbs need to meet these younger consumers’ expectations for modern, personalized customer experiences. Here's how:
1. Educate prospective customers.
Millennials coming from big cities are accustomed to having huge bank brands on every street corner. Community banks and credit unions need to let prospective customers know what makes them just as attractive as those big banks.
Promoting features such as flexible lending standards, small-business loans and personalized relationships can help attract millennials looking to put down roots in a community. Young professionals who relocate to suburbs and small towns may also be interested in opening their own companies because the lower cost of living makes entrepreneurship more attainable. Proactively marketing to them can help you establish long-term relationships that will flourish as these consumers embark on this new phase in their lives.
2. Be digital first—and automate.
The need for a digital presence goes without saying. But to be credible with millennials, your organization needs a modern, intuitive, mobile-friendly website and mobile app. Young people are accustomed to making purchases and checking their account balances on smart phones, so make it easy for them to do that. Provide other useful services such as person-to-person transfers, online bill payment, and budgeting via the app as well. You want them to see that they're not losing any conveniences by moving to your institution.
Leverage tools such as artificial intelligence (AI) and automation as well. Millennials want to have control over their finances, and they want insights into their money 24/7. AI can help you provide the types of information they want, including budgeting help and forecasting for their savings and investment prospects.
3. Create products tailored for millennials.
Find out what your millennial customers want and develop products for their unique needs. Many of them will likely want to buy homes and may be looking to save for starting a family or establishing a college fund for their young children. Focus groups, surveys and social media monitoring and listening are all ways you can gain insights into the demographic.
But drilling down into the specifics of millennial needs and aspirations is important during this phase. What types of houses do they prefer to buy? Are there trends toward small, minimalist homes or toward owning large pieces of rural property? Are a number of young professionals in the area self-employed? The better you understand the nuances of millennials in your community, the more relevant products you can develop. Offering advice that speaks to their circumstances, rather than giving generalized tips, will deepen their trust in your institution.
4. Tell your story on social media.
Social media platforms can be a great way to showcase your solutions and engage with young professionals who are new to the area. Find out which platforms they use most often and become active there. Don't merely post promotional content, though. Share real customer-success stories—featuring details on location, customization and interaction. Developing a strong social media presence could drive foot traffic into your bank or credit union.
The key to capturing millennials' business is to show them that your brand offers personalized service and a commitment to supporting them throughout their coming life transitions. Simultaneously, it’s about providing a high level of convenient technology like they're accustomed to with larger institutions. An influx of millennials can be great news for your business if you're strategic about meeting their needs and building the opportunities they're seeking right now.