How to Retain Generational Customers for Banks

May 9, 2024   -  

Due to the impending Great Wealth Transfer, Millennials will inherit $72.6 trillion from Baby Boomers over the next 25 years—and if your bank can develop a strong customer base with these up-and-comers, you’ll be able to position yourself as one of tomorrow’s leading financial institutions. However, there’s a catch: compared to people in earlier generations, Millennials are two to three times more likely to switch from one bank to another.

Of course, Millennials aren’t the only generation that needs to be on your radar, as Gen Z is also beginning to embrace its financial future. But in its attempts to win over Gen Zers, your institution will face more competition than ever before. An overwhelming 90% of people in this cohort are willing to consider both traditional banks and nonbank companies for their financial needs.

The best way to overcome these obstacles is to create and adopt a strong customer retention strategy as soon as possible. In doing so, your bank won’t merely attract generational customers—it will build lasting relationships with Millennials and Gen Zers alike.

Ways to Increase Millennial Customer Retention

Over the coming years and decades, you’ll need to convince Millennials to choose your financial institution—and stay there. While Millennials don’t always have solid, long-term relationships with their banks, you can make yourself an attractive partner that meets them where they are with the following strategies. 

Prioritizing Electronic Banking

Millennials are a tech-savvy generation, so it’s no surprise that they’re comfortable with digital banking—in fact, 60% of people in this generation prefer mobile banking to other options. That’s a higher percentage than any other generation, including Gen Z.

On the other hand, 67% of Millennials believe their current digital banking experience is far from seamless. To avoid falling into this trap, make sure your website and app offer services like electronic payments, loan rates/applications, and mobile check deposits.

Building a Strong Social Media Presence

Your bank’s efforts to shore up its digital offering shouldn’t stop there. On average, Millennials spend 3.8 hours on social media daily, so having a presence on popular social media apps can help your financial institution connect with customers in this cohort.

Finding Ways to Earn Loyalty

Millennials may be more willing to switch their primary bank than people in other generations, but they’ll still stick with your bank if you give them meaningful reasons to do so. That involves more than just having low rates—instead, you’ll need to offer a frictionless, personalized banking experience and genuinely helpful customer service.

Creating Lasting Relationships with Gen Z

The process of forming connections with Gen Zers comes with its own set of challenges. To reel them in and keep their business, you’ll need to:

Focus on a “Phygital” Strategy

Surprisingly, 43% of Gen Zers view real-world banking as a priority; according to these young investors, banks with physical branches offer “peace of mind” that big tech doesn’t. Instead of switching to a fully digital banking strategy, you’ll want to find ways to balance your physical and digital offerings.

Take Digital Banking Seriously

Brick-and-mortar banking is a comfort to many members of Gen Z, but a lot of them still prefer to do their banking online. That’s yet another reason why your bank needs a robust digital offering (and a solid social media presence, as Gen Zers spend 4.5 hours on social media each day).

Provide Diverse Products and Services

As you can see from their near-50/50 split on the importance of physical banking, Gen Z is a demographic of contrasts. Members of this cohort vary drastically in their financial requirements, desires, and opinions. To truly appeal to Gen Zers, your bank should listen closely to individuals in this generation, focus on creating meaningful relationships through your services, and build product offerings that can satisfy their diverse preferences.

Legacy and Estate Planning: The Key to Retaining Generational Customers

By following the advice shared above, banks can take meaningful steps toward attracting and retaining generational customers. Still, if you’re trying to stand out from the crowd, even these actions might not be enough to accomplish this goal. After all, any financial institution can post more on social media and seek input from its customers.

That said, few banks offer legacy and estate planning, and these services address the Great Wealth Transfer directly as well as give your financial institution the digital and service advantage it needs to stay competitive well into the future. Despite the obvious importance of legacy planning—especially as Millennials and Gen Zers become the primary wealth caretakers for their families—two-thirds of adults in the United States don’t have one of these plans yet. By engaging with digital strategies involving the legacy plan creation process, you’ll build meaningful, emotional relationships with them along the way.

Why The Postage Is Right for Your Bank

There’s a simple reason why most financial institutions don’t introduce services related to legacy and estate planning: they aren’t capable of offering them without outside help. But by working alongside an established life planning and succession software platform, your bank can easily reap the benefits associated with these services.

If your financial institution is looking to provide legacy/estate planning services, The Postage is the perfect partner. Banks that team up with us don’t have to wait long to see concrete results—in just a few months, they can benefit from ROI increases in excess of 300%.

Though we definitely deliver financial benefits to the institutions we work with, The Postage’s platform is relationship-driven, which means we prioritize connections with customers over hard numbers. Because of that, we excel at helping banks build resilient, multi-generational connections with their customers.

When your bank starts working with The Postage, it will have an opportunity to provide:

Individual Services

For the legacy and estate planning process to work like it should, older and younger family members need to be able to collaborate and share information. The Postage can help these people by keeping track of:

  • Estate details. People handling estate planning must manage a great deal of information—including broker information, deeds, insurance details, and inventories. When you manage and hold on to these details for your clients, they can focus on making the right choices for their family members.
  • Documents and Data. Data points and documents such as account numbers, wills, insurance policies, and passwords also play essential roles in the legacy planning process. By putting everything in a single, easily accessible place, you can give your customers the security they deserve (and create a link between beneficiaries and your bank).
  • Messages and Memories. In addition to documents, data, and estate details, your customers might want a place to privately capture the memories they’ve saved as videos and photos. With The Postage, your clients can store these files in digital vaults and use timestamp features to look through them with ease.

Enterprise Services

Businesses need a reliable succession strategy to avoid difficulties in tumultuous times. Conversely, neglecting to create a succession plan isn’t just risky—it can make it all but impossible for companies to continue operating with any sense of stability and continuity. 

Even so, two-thirds of small and medium businesses (SMBs) don’t have a succession plan in place. Your bank can make life easier for SMBs and other business clients by helping them deal with:

  • Vital Documents. As is the case for individuals, companies need to manage countless documents while preparing for the future. That definitely includes any documents explaining their protections, processes, and plans.
  • Details and Assets. If a business owner plans to transfer ownership of their company, they’ll need to give the new owner a lot of information. Fortunately, digital legacy planning makes it easy to organize crucial data such as accounts and contacts ahead of time.
  • Succession Strategies. When businesses have a clearly identified line of succession and a true understanding of their own succession process, they can change hands with zero issues.

Protect Your Customers’ Legacies—And Your Own

Generational customers can be difficult for banks to retain—especially when the customers in question are Millennials and Gen Zers. But if your bank knows how to build relationships with people in these age groups, you’ll be ready for the Great Wealth Transfer and be a part of the financial success it brings.

No matter how young or old your customers are, they have one thing in common: a desire to build a legacy that lasts. The Postage’s platform can help today’s account holders and tomorrow’s beneficiaries plan for the future while solidifying the legacy of your financial institution through new accounts, increasing non-interest income, and boosting deposit growth. If you’d like to learn more about our services, book a demo today!