IT Key To Bridge Gap Between Millennials' & Baby Boomers' Banking Needs

As retail banks struggle to recapture customers in the wake of the global economic crisis, emerging generational differences in the way consumers wish to bank will require financial institutions to adapt to the divergent needs of their customers, reports a study released recently by Microsoft.

The Microsoft ‘Millennials and Baby Boomers Banking Channel Preference Survey 2009’, conducted by US-based KRC Research, found that adult millennials (ages 18-29) and baby boomers (ages 45-63) prefer very different channels for their banking activities. These preferences vary from high-touch, in-person experiences at the branch to more automated experiences on the Web, on mobile phones or at interactive kiosks.

“Generational differences are a challenge for banks as they try to create consistently positive, integrated banking experiences, regardless of channel,” said Colleen Healy, general manager, US Financial Services, Microsoft. “Banks are building loyalty with boomers today primarily through in-person retail branch interactions, while creating new offerings via online and mobile channels to attract millennials, the next generation of customers. Microsoft is focused on helping banks create this seamless, connected experience across multiple screens and channels, tied together through cloud computing.”

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

Varying Channel Preferences

The Microsoft study shows that different generational groups of respondents have very different preferences for conducting banking transactions. Millennials represent an untapped customer base for banks, but they have specific high-tech needs in terms of how they communicate and network with their financial institutions. For example, they are much more likely than baby boomers to use Web banking (49 percent versus 35 percent) and to find online service capabilities to be very important when researching a new bank (54 percent versus 42 percent).

Baby boomers, on the other hand, are much more likely to prefer banking transactions in person at a branch (44 percent versus 32 percent), and half (50 percent) report that they never bank via the Web using a personal computer or phone browser.

Millennials and Baby Boomers Find Common Ground on Bank Criteria

While generational gaps in banking channel preference exist, both millennials and boomers found similarities in their criteria for choosing a new bank. Customer service ranked as the highest priority for both millennials and boomers (98 percent versus 96 percent), followed by rates and fees (97 percent versus 96 percent) and superior security against identify fraud (96 percent versus 95 percent). Also ranking high were access to bank retail branches (95 percent versus 94 percent) and insurance on deposit accounts (92 percent versus 92 percent).