That is if banks can tailor a unique package of services for their needs.
Contrary to popular perceptions, millennials in Australia could become a promising segment for banks, according to the latest report from GlobalData, a recognized leader in providing business information and analytics.
The company’s latest research reveals that provided banks tailor a package of services to suit their needs millennials constitute a growing consumer segment for them with ample cross-selling opportunities.
Here's more from GlobalData:
The number one cross-selling opportunity lies with offering a savings product which has the added benefit of demonstrating the value of banking. Millennial customers are, on average, 5% more likely to save with their main transaction account provider than the rest of the population.
Much has been written about the generation’s disengagement with financial services, their meagre credit uptake, and other prevailing notions such as their readiness to switch banks even if one does sell them a financial product.
Andrew Haslip, GlobalData’s Financial Head of Content for Asia Pacific, explains: “Whether this is due to customer apathy and disengagement with financial services or a desire for convenience, which we also know digital native millennials prize highly, it matters little.”
GlobalData’s research found that banks can still strike beneficial relationships with millennials and offer them real value. Since Australian millennials are taking up an increasing share of the population, banks need to work out how to target this challenging segment profitably.
Given the faster-than-system growth that millennials’ savings have seen in Australia over the last five years, the utility of starting with savings as a means to establish a relationship with this segment is clear. Banks looking to build up their retail deposit bank can very profitably do so by targeting millennials. After establishing their relationship with millennials through saving accounts, banks can try to sell them credit products.
Haslip concludes: “Savings and credit are deeply linked for millennials as we need to remember that one of their key savings goals is building up that home deposit. Perhaps those millennials aren’t so credit-shy after all!”
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