The millennials shall inherit the earth (and marketers should pay attention)
Millennials are set to become the world’s most powerful consumer cohort, but are financial institutions pivoting their marketing activity quickly enough to best reach and engage them? Facebook’s Head of Financial Services, John Arnott, explains how they may be missing a trick.
Financially illiterate. Self-interested. Smashed avocado. These are a few of the lazy stereotypes bandied about in society regarding millennials today.
But the truth couldn’t be more different, as we’ve discovered in compiling our new Connecting With Millennials retail banking report, which reveals insights that should not be ignored.
Whilst millennials (which we’ve defined as 18-34-year-olds) might be worth less than older generations to financial institutions at the moment, that balance is shifting rapidly.
According to RFi Group in Australia: “The value of millennials to Australian financial institutions is expected to increase by almost 80% by 2025 while the value of Gen X and Baby Boomers will decline.” They will be worth around $4,000 each, per year, to their banks.
In short, they are fast becoming the most important generation for financial institutions to consider and understand – with those who don’t pivot quickly enough at risk of being overlooked or left behind.
There’s no doubt that financial services companies recognise the rising value of this demographic – but are they doing a good job at engaging them? It’s one of several questions we put to millennials through a Facebook-commissioned survey late last year.
The results revealed that 78% of millennial everyday banking customers surveyed use Facebook for retail banking-related activities such as following financial services brands. A further 75% of those surveyed use WhatsApp for activities like sharing and asking for banking recommendations with friends and family, while 64% use Messenger and 59% use Instagram.
It’s also telling that collectively, these platforms were shown to be the most common source of discovery for new financial services products – more so than banking websites, search engines, and significantly higher than traditional media channels such as TV and print.
A study undertaken on behalf of Facebook last year in Australia shows that those surveyed paid attention just 44% of the time when financial services ads were shown on TV. That same study showed that during ad breaks, most attention from millennials was focused on their smartphones (50.3%), and the majority of that time was on the Facebook family of apps and services.
And while they’re there, it seems that there’s currently not enough financial services content to satisfy their voracious appetite.
Over three quarters of millennial respondents said they would like to see more financial services content on their Facebook or Instagram feeds, signalling another huge opportunity for the sector to deepen engagement and help to improve the financial understanding amongst this group.
This last point is especially relevant in the post-Royal Commission environment, where transparency of financial products has been a core focus. It’s never been more vital to make sure customers are aware of their options and making the best decisions for their own needs. Banks which embrace financial literacy will be rewarded by the consumer – and social platforms are uniquely positioned to help them spread it.
The rewards are plainly there for those who seize it, take Akbank for example. You may never have heard of it, but it’s one of Turkey’s largest banks, voted the “most valuable banking brand in Turkey” for the seventh consecutive time last year.
It’s taken a progressive approach to talking to younger consumers by using Instagram Stories. Taking inspiration from the phrase “listen to your heart”, Akbank created a collection of video ads featuring people singing a rendition of a Turkish pop song.
The campaign – which aimed to inspire and inform new and existing customers – was a roaring success. It drove a 28-point increase in ad recall, a five-point increase in message association and generated 3.3 million views.
It also caught the attention of other regional banks, who promptly followed Akbank’s lead. Imitation, as they say, is the sincerest form of flattery.
Then there’s Starling Bank, a digital challenger headquartered in London. Founded in 2014, it needed to spread the word about its unique offering, a mobile-only bank account. It also wanted to boost the number of people who were opening accounts and lower the acquisition costs for new customers.
Using Facebook’s SDK (Software Development Kit), Starling could accurately measure how people engaged with the app.
Through a two-month Facebook advertising campaign in 2017 its cost per app install went down by 36%. By November 2017, 44% of all Starling account opens were via Facebook and Instagram.
It’s clear that leaning into this demographic via social channels – the place you will find millennials every day – drives performance.
That’s because millennials, having grown up in the internet age, are more open to embracing new trends than older generations – especially on mobile. They’re highly connected and they
want convenient, personalised mobile experiences, with 72% of respondents saying they are willing to share information in return for offers, advertisements and experiences that are truly relevant to them.
In a time when people can chat directly to local businesses on Messenger, book event tickets on Facebook, or “swipe up” on an Instagram story to buy that coveted new pair of jeans – there’s no reason why banking needs to be an exception.
I’m not saying banks shouldn’t continue to talk to their longstanding and high-value customers, but if they fail to adapt to connecting with millennials in a meaningful way on the platforms they value and use most, they are handing their current and future competitors the advantage.
These insights and many more are discussed in-depth in the Connecting With Millennials retail banking report found here.
These insights and many more are discussed in-depth in the Connecting With Millennials retail banking report found here.
Source: 1. RFi Group, March 2019. 2. “Retail Banking Consumer Journey Study” by Accenture (Facebook commissioned online study of 1000 respondents, ages 18+, Australia, Nov 2018- Feb 2019). 3. “Multiscreen Study – Australia” by Eye Square (Facebook-commissioned study of 108 households, 140 respondents in Melbourne, Australia, 2018).