There’s no such thing as “one size fits all” when it comes to providing financial products and services to your account holders. It is possible to make some educated guesses about what people want by examining high-level data, reviewing national research, and interviewing real people. In this two-part blog series, we’ll do both.
In Part 1, we sat down with some Millennials and Baby Boomers to learn more about the “why” behind the “what” of their banking behaviors. Millennials and Boomers wield an immense amount of economic power (spending more than a trillion dollars a year) between the two cohorts and they represent the two largest living adult generations. Boomers are a wealthy generation and need help managing their impending retirement, whereas Millennials are entering their prime spending years. Notably, Boomers are frequently the parents of Millennial children and the interplay between parents and children over finances may surprise you.
Of course, it’s also important to “zoom out” and see the big picture, so in Part 2 (which you can read here), we examine national trends to see where the majority of these important demographics might be heading.
Our interview guests represent a small sample of Boomers and Millennials:
Boomers (born between 1946 and 1964):
Jane J. (married to Paul J.)
Gen X (born between 1965 and 1980):
Paul J. (Married to Jane J.)
Millennials (born between 1981 and 1996):
Jane and Paul J. are married. Jane was born before 1964 and Paul was born after, and their behaviors and experiences are closely linked — almost indistinguishable. While Paul is technically part of Gen X, you’ll see that his answers align with Jane’s (a Boomer!).
Randy M. also falls on the tail end of the Baby Boomer birth window. His experiences and opinions about money are distinctive among the group.
Shelby L. is the daughter of Jane and Paul. She falls near the end of the Millennial birth window.
Zac G. is the host and also falls squarely in the middle of the Millennial cohort birth window.
Life events leave a lasting impression on financial behaviors.
It’s no surprise that major world events affect how people think and behave. A big enough event or trend can end up defining a generation. We asked our guests to dive into the specifics and learn how their financial behaviors connect to those events. Recessions and inflation loomed large for everyone — but not everyone responds to those phenomena the same way.
What were the major events that happened while you were young that affected how you make financial decisions?
Interest rates matter, but they aren’t the only factor.
Whether seeking a better return on savings or a lower rate on a loan, interest rates can help your institution attract new account holders. But that’s not the only thing they’re looking for. Our guests prove that people have different needs for managing their money as well as their life goals; they want an institution that can help them meet those needs. By listening to what people say (and analyzing data on what they do) you can unlock new growth opportunities.
When was the last time you looked for a financial institution and what were you looking for in a new institution?
The pandemic caused people to take a hard look at their finances.
For some it became an opportunity to pay aggressively on debt; for others it was about spending smarter to deal with reduced income. Yields on savings fell, eliminating some of the differences between institutions, but as you’ll hear, the support role that community financial institutions played was more important than ever, especially for younger people.
What’s the biggest change that COVID has had on your money behaviors?
Parents and children can learn from each other.
The lessons we learn about handling money start early, with parents and caregivers playing a big role — but it isn’t a one-way street. Younger generations are willing to try new things, like cryptocurrency, and demonstrate the benefits to their parents. Counterintuitively, as revealed in this video, sometimes older generations follow the banking choices modeled by their children.
What surprises you most about how your kids (or parents) use money?
What can you do to reach older and younger generations?
If you’re looking for ways to attract new consumers or you’re losing existing consumers and don’t know why, it’s time to find out. You should also interview people to learn their preferences and needs. These one-on-one conversations will yield valuable insights into areas where your institution can improve.
Here are some examples of questions you might want to ask:
What products do they want most?
What types of services would they like you to offer?
What is the number one thing your institution is doing right and should keep doing?
What is the number one thing your institution should stop doing (if possible)?
You don’t have to know all the right questions to ask. The most important thing is that you start the process now and improve it steadily. The gains you make will accrue over time, especially if you combine the insights from your interviews with high-level data analytics from your account holder base, which is something we talk about in Part 2 of this blog series.