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Misunderstanding Millennials

Why Millennials are your bank's canaries—watch them!

Some of what bankers "know" about Millennials is influenced by their own generational filters. Boomer bankers see things through boomer eyes, says Florida banker Chris Nichols. Some of what bankers "know" about Millennials is influenced by their own generational filters. Boomer bankers see things through boomer eyes, says Florida banker Chris Nichols.

Baby Boomer Bank Executive: “It’s hard to understand the Millennial mind. Like, why don’t you want to buy a house?”

CenterState Millennial AVP: “If I had a dollar for every time someone over 40 complained about the Millennial mind I would have enough money to buy a house in a market that you overinflated.”

Point millennial.

At CenterState, like most banks, we struggle to understand the millennial mind as there are some tangible differences in motivation. Consider some examples below.

Hundo P Frustration*

Consider that if you are between the ages of 18 to 34 in Florida, the odds that you switched banks in the last five years is almost 30%. Only 18% of Gen Xers (35 to 54-year olds) switched, which is much higher than Boomers, that switched only 8% of the time.

That is a large difference. And here is the odd part:

Despite the higher propensity to switch, Millennials are more engaged. They interact with their bank almost twice as much compared to both of the other generations.

 Normally, the more engagement a customer has, the more loyal they are. Millennials defy that traditional correlation.

 The same goes for branch proximity attraction.

Millennials are much more likely to use our mobile banking functionality compared to other generations, but most Millennials switched banks because they wanted a closer branch.

How do you explain this aspect of the Millennial mind? Why care about a branch if you are a power user of a bank’s mobile banking?


Misunderstanding is lit**

The answer to the above question is similar to our housing vignette above—we are trying to understand the millennial mind through the lens of the Boomer-mind, even if you are a Gen Xer.

At bank conferences, we repeatedly hear how important the branch is. Recent data (above) would support that point that Millennials still value brick and mortar.

However, that conclusion would be a mistake.

Millennials switch banks to ones with closer branches because they find their bank’s mobile technology lacking. We make them need a branch.

The ease at which you can transfer money in Venmo has spoiled them. In our focus groups, Millennials don’t understand why it is so hard to open an account, get alerts, or transfer money.

They also don’t understand why banks don’t have more educational videos. Particularly, when it comes to how credit card interest is calculated.


That last point is a perfect example. Making a credit card video would be simple, but banks don’t do it.

Just consider how difficult banks make it to understand credit cards:

• Different rates for purchases, balance transfers, and cash advances.

• To calculate your interest from your APR do you divide by 12, 365, or 360?

• Why is the calculation methodology different on new purchases if you have a balance compared to when you don’t?

• Why do we say you need to pay your balance off in full each month to not accrue interest, but then discuss a 21-day billing cycle?

• How long is the grace period?

• Why are billing cycles different on different products and different cards?

Credit cards are way more complex than they have to be. The only answer is that banks were thinking only of themselves, which, oddly, is something that Boomers often accuse Millennials of doing. Like being boiled slowly in a pot of hot water, Boomers never really noticed how difficult they have made credit cards.

Consider an “updated” 2017 credit card terms and conditions:


How easy is that to understand?

How many banks have taken the time to produce a video of one of their most utilized consumer products?


Millennials turn to mobile videos for everything, why not a bank product?

That bank’s woke

Why not simplify financial products across the board and make them available via mobile?

Why is it that only commercial loan brokers and marketplace lenders put their loan rates online? How hard is that? Any bank could do that. We need to.

Digital channels and education are going to play a larger and larger role in Millennials’ decision to choose a bank and to utilize financial products.

Maybe it is because we gave these kids trophies for sports participations that they feel entitled to speak out, but we should be thankful that they are.

We need to stop trying to fit the Millennial into our traditional view of banking products and restructure the way we do business.

Consider them the canary in the customer-experience coal mine. Millennials may waste time taking too many selfies, but at least they didn’t waste time forcing customers to take overdraft protection without their knowledge or creating fake deposit accounts.

We need a new aesthetic.

* Millennial-speak for “100%.”

 ** Translation: “popping”

 *** Translation: “aware”

This article is adapted from Chris Nichol's blog on LinkedIn.

Check out our new blog written by a rotating group of Millennials: "Next Voices"

Chris Nichols

Chris Nichols is chief strategy officer at CenterState Bank Central Florida, N.A., Winter Haven, Fla. He frequently contributes to "UNconventional Wisdom" and other parts of Nichols is a member of the Banking Exchange Editorial Advisory Board.

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