Millennials are driving innovation in the fintech space and many traditional financial institution applications miss the mark with younger generations, leaving them to consider financial products and services from nontraditional sources.
"There are plenty of offerings from financial institutions, but those offerings don't necessarily resonate very well with a growing percentage of users," Jason O'Brien, senior vice president of payments for the San Antonio, Texas-based financial services firm SWBC, said. Millennials have higher expectations when it comes to app functionality and features, he added.
SWBC recently completed an in-depth focus group with about 60 millennials in an effort to learn which features they seek in their mobile banking apps.
According to the focus group results, millennials want a more user friendly, less data-centric experience.
"Most apps show transactions in a purely linear format, it's just a long list," O'Brien explained, adding that millennials seek a more intuitive look and feel as opposed to one big stack of transactions.
O'Brien also detailed the following insights from the focus group:
- When users interact with many nonfinancial apps, they feel in control due to features such as tap-and-drag and interface management capabilities. "It makes them feel like they have a deeper level of engagement with the app," he said.
- Millennials want a crisp and user-friendly banking experience that is not provided by most financial institutions today.
- Sixty percent of interviewees indicated their app information needs updating more frequently than every 24 hours.
- Sixty percent of millennial users in the credit union space indicated an app that only worked with a single credit union account would not be appeal to them. They want to be able to access all their accounts, even those at other financial institutions.
O'Brien emphasized, "They are not comparing your features to other financial institutions. They are comparing you to other apps like Uber where the user experience is key and innovative."
Financial institutions have an opportunity to close the gap, however.
"There is a lot of opportunity to try and reengage those users who may have abandoned financial institution apps," O'Brien said.
Rapid member expectation changes driven by nontraditional competitors requires credit unions to think innovatively, according to Andrew Downin, managing director of innovation at the Madison, Wis.-based Filene Research Institute.
The independent financial think tank is trying to spur transformation through its Filene i3 innovation program, which is designed to help credit unions build operational efficiency, generate loans, mobilize savings, reach communities and strengthen membership.
Through virtual discussions, collaborative fieldwork and self-study, Filene i3 innovators from the U.S and Canada create possible solutions.
"Part of what we teach the i3ers is the Filene method of innovation," the Filene managing director said. "That philosophy briefly states that any innovation, any new change brought to market has to start with solving problems for end users."
Read a full account of current fintech innovation in the May 11, 2016 print issue of Credit Union Times.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
