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5 ways to keep millennials happy with your financial service

At a recent after-work happy hour, my friends and I sipped jasmine tea-infused cocktails and intermittently peered into our phones as we talked. Jenny was using three different apps to arrange dates and weekend plans. Samantha used multiple apps, too, but she was busy transferring money into her checking account, paying me back for our drinks, and checking to make sure she was within her "food and drink" budget for the month. We're millennials, so this social multitasking is the norm.

So is wanting to have options—or to keep our options open. Online dating has supposedly created a “dating apocalypse,” where millennials don’t want to be in an exclusive relationship when they have access to hundreds of singles with a swipe of a finger. Similarly, millennials don’t want to be in an exclusive relationship with their primary bank, due to the increasing number of financial services available.

According to a report from Bain & Company, hidden defection—using other financial services besides your primary financial institution—makes up between 25 to 51 percent of additional banking product purchases, for things like credit cards, loans, insurance, and so on. And with the rise of tech giants like Amazon and PayPal now launching financial offerings, along with other startups that provide newer, more streamlined digital financial products, it’s become even more difficult for banks to build customer loyalty. This is especially true when it comes to millennials, who are more willing than other generations to use these new services.

So how do you keep millennials happy with your financial service when they know they can change services on a dime? Here are five suggestions.

1. Deliver an easy digital experience

Millennials are just as comfortable managing our finances online as we are our dating lives. We were born into a digital world, so it may not be surprising that 73 percent of us are willing to buy financial services from established tech companies like Amazon and PayPal. To keep up, traditional banks need to bring their services online, fast.

So how do you keep millennials happy with your financial service when they know they can change services on a dime?

But merely having a digital presence is old news. We’re used to using convenient digital tools across all areas of our lives, so if online banking isn’t effortless, we won’t be satisfied. In fact, according to Bain & Company, only 44 percent of online customers and 34 percent of mobile customers felt that their online banking service is easy to use.

But some financial services companies are getting digital right in millennials’ eyes, such as Mint, a budget tracker and planner with over 20 million users. “I use Mint because I want a visual way to budget plan. It’s just really easy to use,” said Saberena Y., age 22.

Making managing finances “easy” was one of Aaron Patzer’s goals when he founded Mint. In an interview with VentureBeat he said: “You can get set up in ten minutes and then spend five minutes a week on your finances, because most people don’t want to spend too much time on their finances. That’s the premise—you’ve got to make it easy.”

[Read also: Millennials are crushing it in customer service]

Another financial services company praised by millennials for its easy digital experience is Robinhood, a free-trading app. Jacob W., age 29, offered: “Robinhood is so simple, you don’t even have to have a financial background to use it. You can literally make trades off your phone.” Similarly, Venmo, an app that allows you to instantly transfer money, is a favorite among millennials for its simplicity. “Venmo is the most convenient way to transfer money, and I don’t even have to open my computer,” said Samantha E., age 23.

In short, millennials live busy lifestyles, and

2. Balance the power of technology with the power of human connection

We also need support systems that fit our lifestyles. For basic questions or technical help, we don’t want to have to visit our bank or wait on the phone—and it’s not just our generation that feels this way. In the UK, consumers gave a 20-point higher average Net Promoter Score (a key metric of loyalty) to routine activities performed online over those accomplished over the phone or in-person, according to Bain & Company.

“I was traveling and my credit cards weren’t working. It was inconvenient to have to call my bank and wait for help. It would have been a better experience if I could solve this issue myself within my mobile banking app,” said Samantha E.

We also need support systems that fit our lifestyles. For basic questions or technical help, we don't want to have to visit our bank or wait on the phone—and it's not just our generation that feels this way.

When the digital experience is seamless, everyone benefits. Customers get their problem solved and are more likely to stick around. Plus, banks can save money by enabling customers to solve issues themselves, or by taking advantage of AI solutions. Bain & Company reported that the five largest banks in Mexico could reduce costs by $500 million if they utilized digital support systems.

AI-powered responses also help to decrease the amount of support tickets generated for commonly asked questions, enabling more personalized support for higher-stake issues. And when it comes to these stressful concerns, millennials desire a real human connection.

“Chatbots are great for quick fixes and it’s reassuring that there is 24/7 support. However, with high-impact situations, I feel more comfortable speaking with a real person so I can better understand why something is happening and what the lasting impact is,” said Jacob W.

3. Put customer needs first

Banks are building more loyal customer bases by organizing online services around the customer experience. This means thinking about the action a customer needs to take—for example, paying down a student loan—rather than organizing around product offerings, like credit lines or loans. If you don’t know what’s most important to your customers, support data can help uncover pain points, since they are often the most frequently asked questions.

[Read also: Don’t ignore your customer data, use it to create a better experience]

Customer data can also help inform when to educate customers about the services that might best meet their needs—helping to avoid that hidden defection. Millennials use products that resonate with us—that’s why we pay attention to ads on our social media feeds that are catered to us and look for personalized offers in our inbox.

“I learned about the last two financial products I purchased through marketing emails. I wasn’t actively researching the best services out there. These just spoke to my financial needs at this time,” said Jacob W.

Millennials use products that resonate with us—that's why we pay attention to ads on our social media feeds that are catered to us and look for personalized offers in our inbox.

According to Bain & Company, over 50 percent of consumers would have used a service from their primary financial institution if they had been made an offer. Customer data enables you to create automated workflows and set up event-based triggers that make the right offer at the right time, ahead of your competitors.

4. Be transparent, and help us help ourselves

With capturing customer data across multiple online and in-person experiences, comes the expectation that it will be secure.

“I have put my faith in the financial services that host my data and find a majority of these services to be rather transparent. Since becoming a loyal member, and consequently an employee at Credit Karma, this faith has only strengthened. Without this transparency, I don’t believe trust would exist between the user and the service,” said Anyssa Dunning, talent initiatives project coordinator at Credit Karma, and a millennial herself.

One of the reasons why millennials trust financial tech services with our money is because they’re transparent. For example, Credit Karma, a consumer technology management platform popular with millennials (in fact, 1 in 2 millennials are members), doesn’t just alert users when their credit score has changed. Instead, they explain why their score has shifted. This educative approach not only fosters trust, but also

“I always felt like I was kept in the dark when it came to my finances, especially considering the lack of transparency I experienced with my traditional bank,” said Dunning, who was also a victim of the 2016 Wells Fargo account scandal.

“I feel as if many financial services present numbers without meaning or context. For example, college students often make uninformed financial decisions, such as taking out a bad student loan, without understanding the lasting repercussions. To have a company or platform explain the significance of a variable interest rate, for example, allows the user to become more confident with their finances and also grants them autonomy in their own financial journey.”

[Read also: 8 steps to creating loyal, human, customer connections]

5. Make it personal

Millennials look to financial services for advice on how to stay on top of our finances. We want to learn how to budget-plan or build our credit score.

And while millennials prefer personalized advice (40 percent of consumers would be less likely to leave their bank if it offered a more personalized experience), it doesn’t have to come from a real person. For example, Mint uses in-app alerts to advise users on their financial health, using the same millennial-friendly tone as Mint’s Twitter profile.

“You shouldn't have to be that person who is constantly watching interests rates, figuring out what to do and when. Because software can do that for you, we can do that for you,” Patzer said.

Similarly, Lemonade, a digital home and renter’s insurance service, uses an AI bot named Maya to advise users on the best plan for them. “I used Lemonade when I purchased my first apartment, which was a big milestone for me, and I felt supported the entire time,” said Jacob W.

Millennials look to financial services for advice on how to stay on top of our finances. We want to learn how to budget-plan or build our credit score.

Millennials are looking for services that give them the advice they need to feel confident reaching new financial milestones. Credit Karma also provides users with personalized recommendations on how to use their credit more wisely.

“I feel there is a huge gap when it comes to educating young adults on how to manage their finances responsibly,” said Dunning. “What I find most valuable in an app like Credit Karma, is that it provides me with the tools and resources to become financially literate. This foundation allows me to better understand what comprises my credit score, teaches me about filing my taxes, and enables me to make smarter purchasing decisions. With this support, I feel more confident moving towards my next financial steps, whether it be saving for a trip or eventually purchasing a home.”

So what about your financial service—is it happy hour-friendly?

Hannah Wren is an Email Marketing Specialist using customer data to develop multi-touch nurture programs for several audiences across the customer lifecycle, from on boarding and education to conversion and retention. Her hobbies include trying new foods and thinking about the human impact of technology. Connect with her on LinkedIn.

Repeat customer: Ellevest

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