When you talk to the co-founder and CEO of a mobile-first digital bank account offering, you are likely to hear that millennials, to put it lightly, are not fond of big banks. As the thought goes, the not-as-young-as-they-once-were consumers are not impressed by the services offered by the titans of brick-and-mortar banking, and are on the lookout for banking services that better suit their wants and needs. And that’s where digital banking options like Chime (a mobile-first digital bank account, for those of you playing at home) enter the picture.
This month’s Digital Banking Tracker™ cover story features an interview with Chris Britt, Chime’s co-founder and CEO, about what he’s doing to lure millennials away from big banks, and how the company will have to evolve in order to keep those customers in the long run.
Here’s a sneak peek:
For now, Britt said, many young consumers have found more beneficial financial relationships and features away from the big banks. But it won’t stay that way unless alternative offerings continue to develop along with the needs of their users.
“I would agree with the assessment of: If you don’t continue to evolve your product set beyond just a deposit account, you’re absolutely going to lose customers over time,” Britt explained. “I recognize that the customer set that I’m serving right now does not have a particularly complex set of financial needs, and if I don’t continue to evolve that product with them over time, then I will lose them.”
To keep up with the changing money management needs of millennials as they grow their financial portfolios and move toward more sophisticated banking features, Britt said his team plans to communicate with users often to help determine their expanding needs, and to find out what Chime is doing right (and wrong.)
If digital-only offerings cannot adapt as their customers develop more complicated financial needs, Britt said, big banks will ultimately win over those customers.
“It could be refinancing your student loan, it could be auto loans, it could be overdraft lines or other sort of short-term lines of credit, but yeah, look, we’re not deaf to the fact that people are going to need to establish credit scores and buy a house, that sort of thing,” he said. “Because eventually, Wells Fargo is going to say ‘Hey, well I’ve got this auto loan for you and if you have a checking account here, you’ll get 50 basis points off the rate.”
News from around the world of Digital Banking
Whether it’s Chime or other apps, millennials are increasingly turning to their mobile devices to keep track of their financial health. According to new research released by Halifax Savings, 80 percent of adults between the ages of 18 and 24 said they believe mobile banking services are an effective way of saving money.
In order to make sure the market’s youngest consumers will utilize their services, digital banking companies and FinTech institutions around the space are planning new ways to help millennials safely access their financial information with a tap on their mobile devices.
Shailesh Chaudhry, Director of Business Strategy IoT Group at Intel, told PYMNTS’ Karen Webster about the company’s new RealSense technology in a recent interview. Chaudhry said that she believes tech can be most transformative in the banking and financial service space, thanks in large part to its authentication potential.
Meanwhile, Fidor Bank and Telefónica Germany are preparing to roll out a new type of banking service. The pair announced “02 Banking,” a new banking platform that promises to combine a mobile phone contract with financial management services via a new mobile banking app.
As more consumers access their bank information from mobile devices, there’s an increased risk for fraud or cybercrime attacks. With this in mind, the European Central Bank recently announced a database that would monitor and register cybercrime attacks at commercial banks.
The June edition of the Digital Banking Tracker™, powered by Urban FT, features the latest news and analysis across the FinTech and consumer banking space, along with the rankings of 68 players around the industry — including 10 new profiles — for their readiness to seize this new banking reality.
To download the June edition of the Digital Banking Tracker™, click the button below.
About the Tracker
The PYMNTS Digital Banking Tracker™ brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with the rankings of more than 50 companies serving or powering the digital banking sector.