What do you think of that headline? I thought I would try my hand at clickbait. It’s a trick question, of course. Young people (Millennials, Generation Z) are just fine with banking, they just don’t like going into banks.
That’s bad news for community banks because it makes geography – one of a hometown bank’s biggest advantages – irrelevant. Today’s young consumer will gladly bank with anybody that can transfer money electronically that also offers attractive features and benefits (rates, technology, etc). Remember, these are the same people who prefer to use their phones for social media, instant messaging and text rather than calls. In fact, perform your own informal survey with people under thirty, and you’ll likely find that they don’t just dislike robocalls – they dislike ALL calls. It stands to reason that they don’t want to drive all the way over to the bank to speak to a teller and make a deposit. They want to do it online from their mobile device (like they do everything else, from shopping to hailing a ride).
We’re never going to change how these folks act (our parents couldn’t talk us out of loud music or watching too much TV, either). Instead, what if we flip the script and see this state of affairs for what it really is: an opportunity for community banks. After all, shouldn’t the fact that geography no longer matters be a huge advantage to a community bank located in a rural area?
Technology has leveled the playing field, and that goes both ways. Anybody anywhere is now a prospective customer for your bank.
This probably doesn’t mean you can put a giant corporate bank out of business by coaxing away their customers, but it definitely means that you can keep your own – and even grow outside of the traditional borders of your service area.
The key is to stop thinking that there are two sets of rules when it comes to bank services and products. Young customers will not put up with inferior products and services just because you are located in their hometown anymore. Your community bank needs to have the same capabilities as the big banks that advertise to these customers on social media.
The positive side of banking’s rush toward technology is that it is now entirely possible to offer the same services from your hometown bank as the giant institutions offer from their data centers in Chicago or New York. Your young customers will stick with you if you give them progressive policies and services. They might even tell their friends. Just don’t expect them to come in for a cup of coffee. That’s what Starbucks is for.
Fintech has changed banking a lot in the last decade, and those changes don’t show any signs of slowing down.
Being located away from the big city just means that your bank is that much closer to the cutting edge. It’s more nimble and agile. It’s easier to adapt and adopt new ideas. But only if you embrace change and make the new rules work for you instead of against you.
It’s time to concentrate on bringing young customers into your bank instead of into your branches. It starts with technology and branding, and we can help.