Though born decades apart and into very different circumstances, Baby Boomer (born 1946-1964) and Millennial (born 1980-2000) customers show a surprising amount of overlap in their preferences and priorities for the customer experience at their banks.
Baby Boomers are Aging Youthfully
Baby Boomers came of age during the wild 1960s and 70s, and while they might not be able to rock’n’roll all night and party every day anymore, they’re not ready to resign to their rocking chairs just yet.
Here you can begin to see some of the commonalities between Boomers and Millennials. Both generations entered adulthood against the backdrop of oversea war, economic depression, and social unrest. The 2008 recession hit their wallets hard: Boomers watched their retirement funds wither, and Millennials worry if they’ll earn enough to pay off their immense student loans. To varying degrees, both groups know the value of doing more with less and balancing their desire to make purchases against the risks of running out.
It’s Not Just About Retirement
Sure, retirement is a pressing issue for Boomers exiting the workforce and preparing for a new phase of life, but it’s not the only thing they’re doing with their money.
Despite the setbacks of the recession, Baby Boomers earn about 47% of all income in the United States, totaling $4 trillion. [Source] With their adult children leaving home and establishing their own families, instead of settling in, Boomers are active and adventurous. They want to be able to keep up with their grandkids and are using their spending power to catch up with all the dreams they may have put off during their parenting years.
That might mean new car purchases, home renovations or relocations, or even starting a business – all things they’ll be looking to their banks to help them finance and navigate. These products aren’t just the territory of young adults getting established.
As we’ve reported previously, Millennials, too, are entrepreneurial adventurers who tend to value experiences over material goods. So while they may be renting a while longer before they purchase a house and putting off traditional milestones like marriage and child-rearing, they see that as freeing up capital to pursue their dreams while they still have youth on their side.
They’ve also absorbed their parents’ concerns about funding their retirements and, according to the Transamerica Retirement Survey, 74% of Millennials have begun saving for retirement a full 13 years earlier in life than Baby Boomers.
This knowledge should lead banks to carefully consider how and to whom they are promoting their small business, retirement, and home equity products and services.
Linked In with Technology
A major slice of shared territory between these two generations can be found online, and in particular, on mobile.
Millennials and Boomers alike are early adopters of new tech products and are comfortable navigating the world through the lens of their smartphone or tablet. 71% of Boomers bank online at least once per week, and their use of mobile is expected grow exponentially over the next few years.
So by prioritizing a streamlined, personalized, and mobile-optimized experience, banks can satisfy both sets of customers.
Where they differ, though, is in their concern about the security of their financial information. Millennials, who have largely grown up with tech, tend to be more trusting; Boomers are willing to adapt and learn, but remain suspicious about the trustworthiness of devices, networks, and data banks.
61% of Boomers believe the risk of their financial data being compromised will rise within the next three years, compared to 45% of Millennials. [Source] Adults who are not already using online banking options are even more suspicious and unlikely to be converted, no matter how slick the user experience. Nothing will send customers of any age on the hunt for a new bank like finding that their personal information is at risk, for which they unforgivingly hold the institution responsible.
With data breaches making headlines on a regular basis, banks who want to promote their online and mobile services must communicate a strong message of security, not just convenience.
Want to know more about the demands of different demographics within your target market? CSP can deliver all the intelligence you need and offer solutions to meet your specific goals. Contact us today with your questions and concerns.