Who’s unaware that onboarding is critical, and that it’s especially challenging to attract, onboard and develop Millennial account holders? If your onboarding approach for Millennials is the same thing you’re doing for older generations, you’re unlikely to grab their attention or foster loyalty.
The account-opening experiences of Jeziel De Jesus Vega, Deluxe’s intern through the non-profit Genesys Works, illustrates the challenges. Jeziel is a senior at Mounds View High School in Minnesota, and moved here with his family from Puerto Rico:
My whole life, I saw my parents go to banks, write checks, and withdraw money with their debit cards, but I never saw them open their checking and savings accounts. So when I opened a teen account in Puerto Rico, it was my first experience.
We waited a half hour at the bank before someone met with us. My mother used to work at a bank, so she knew everything the bank would need to open the accounts. I was excited because I was going to get a debit card! When we finished opening the accounts, my dad handed me the card and said, “This is for emergencies only. Keep it safe.”
When we moved to Minnesota, we closed my accounts in Puerto Rico, got a check for the balance and took it to a bank here. My father told them we wanted to open an account for me, and they kept talking about stuff that I didn’t understand. In a way it was a language thing, not because I was from Puerto Rico, but because they used banking terminology that I didn’t understand at all. They were talking about the interest rate, the types of accounts we could have, the minimum amount, overdraft fees and more. It was so much gibberish!
Then, my dad gave the bank lady the check from our old bank in Puerto Rico. She looked at it very strangely, looked at us and asked my father what bank the check was from. He told her the name of our bank in Puerto Rico and she asked: “What currency is this? Are these pesos?” My father got furious and answered: “No, it’s from Puerto Rico. Puerto Rico is a U.S. territory. It is a U.S. commonwealth. We use the same currency you do, the U.S. dollar.”
It took three people, including the bank manager, to finally figure out where the money came from. They even called the bank to see if it was a real bank. After all that commotion we finally opened the accounts.
I think the process would have been easier online, but my dad wanted to have a personal contact with the bank so he could say what he wanted specifically. In my opinion, it would have been easier to do all of this if the account weren’t a teen checking account.
No one at the bank offered to help me understand how to use my accounts. I did not know how to use and manage my account well until my junior year in high school. It wasn’t until I took a personal finance class, an elective class, and learned how to manage my money and my accounts well.
It would be nice to be able to say Jeziel’s experience is unusual, but the truth is … it’s not!
Financial institutions can do more to ensure that families not from their area are comfortable and understand the financial institution’s offerings. Financial institutions should effectively walk these customers through the complex programs and financial terms.
Onboarding is a multi-layered process, but making the first steps of it — the account-opening process — as easy as possible is a quick hit to attract young people. At the very least, financial institutions need to ensure that it’s easy for Millennials to save money with you. It’s a critical start, since you never know where their lives will lead. Will they become the next CEO? The next Mark Zuckerberg? They will always remember that first savings or checking account and how they got started.
Providing personal financial management support is also key to onboarding Millennials. Multiple studies have shown that Generation Y likes to manage their own money. Synergistics Research Corporation found nearly half of checking account holders use Personal Financial Management (PFM) with their main checking providers, and use was greatest among 18 to 34-year-olds.
Nine in 10 of PFM users perceive its value, with six in 10 regarding it as “very” valuable. Most consumers used third-party, non-bank tools, and 40% of those users said they would rather be using PFM tools provided by their financial institutions. Financial institutions should develop strategies for introducing PFM to customers, such as easy steps for viewing a limited number of accounts or using a simple expense analysis tool.
Finally, financial institutions should help new teen customers, and their parents, understand their checking account options. Explain to them the types of accounts offered, the differences between them, terms and conditions, features and how each works. As mentioned in the previous blogs in this series, help elevate Millennials’ levels of financial literacy, like how to write a check and offer value-added services to checking accounts to engage them. By providing them with financial knowledge, we can demonstrate to them the value of building a strong relationship with their financial institutions. It would seem like an intuitive step that all banks would take, and we now know from Jeziel’s experience that there’s a definite need and more to be done.