How to Close the Deal with Millennials: Don't Waste Their Time

Myriad surveys and reports note that millennials don't talk on the phone and they don't write or answer emails.

So it's no surprise that Citizens Bank in Providence, R.I., was getting very low response rates when communicating in those two channels with its largely millennial student loan applicants.

"What we learned is that they are not very engaged in these channels," said Mary Fiorille, head of the unsecured lending business at the $140 billion-asset bank. "It was very difficult to get them to provide us the information we needed" after they started a student loan application, she said. "So there were delays in application closings."

To address the problem, the bank tried a new mobile messaging function. The technology, developed by a Philadelphia firm called Relay Network, captures a customer's mobile number when they fill out a loan application through the bank's mobile app or website. It then sends messages from the bank to their mobile phone, which prompts them to provide the bank with whatever further information it needs to complete the application. Customers and bank service reps can also communicate one-on-one via the messaging service, known as Citizens Bank Wire.

"These customers, I think just like all millennials, respond to quick sound bites," Fiorille said. "So we had to tailor our communications for them."

The result, she said, has been a higher response rate from student loan customers who communicate through Citizens Bank Wire than when the bank primarily communicates with phone and email. Loan completions are 10% higher and time to completion 40% lower for those customers using Wire. (Though the service was created with millennials in mind, any Citizens customer can opt in for it.)

Millennial customers have grown accustomed to communicating with social messaging apps, like Snapchat or Whatsapp, so it makes sense for banks to try to replicate that type of platform, said Peter Wannemacher, a senior analyst with Forrester Research.

"Millennials definitely like short, quick messaging; they don't like email and even something like Facebook is too long-form," he said.

Further, according to research from Javelin, millennials prefer texting over voice interactions and are 40 times more likely to take action when sent a text message.

All this means banks will have to invest more in alerts and messaging services, both in their own apps, and on third-party platforms, Wannemacher said.

"In addition, banks need to focus on what we call foundational digital initiatives," he said. "This means re-engineering and integrating back-end systems to enable next-generation online and mobile experiences. millennials are, on the whole, instinctually digital. And despite what some executives think, this is not because they've had bad offline customer experiences with a call center rep or an in-store representative — which many bank executives think are the cause of people's desire to use digital. Instead, it is simply a natural, intrinsic part of many millennial consumers."

That's why Relay's technology was designed to "look and feel like the social messaging apps we're all comfortable with," said Matt Gillin, chief executive of Relay, founded in 2011.

"It looks and feels like it's your own private Twitter feed between you and the bank," he said.

The use of Citizens Wire will not end when customers need student loans; Fiorille said the messaging channel enables the bank can stay connected with them as they move on to other financial needs later in life.

"As we move forward we are looking to explore how we can expand the use of the Wire and deepening the relationship with the customer across other products," she said. "We'll continue to communicate with them beyond just the life of loan, and about other financial needs that customer might have in future."