This year at the 21st anniversary of Black Enterprise‘s Entrepreneurs Summit, BE Smart held its first ever case competition among HBCUs, hosted by the Bill and Melinda Gates Foundation. Teams of four students each, one team per school, competed to solve real world business problems solicited from the nation’s largest black-owned businesses–the BE 100s.
One of two problems that were solicited came from Industrial Bank, a Washington, D.C.-based financial institution that has served the black community since 1934. It has been a stalwart on the Black Enterprise rankings of the top financial service companies owned and operated by African Americans. In 2016, Industrial Bank held the No. 5 spot on the BE Banks list.
[Related: $2.7 Million In New Deposits At Black-Owned Industrial Bank]
The participating students were from Bethune-Cookman University, Florida A&M University, Fort Valley State University, Hampton University, and Morgan State University. The problem: Millennials are a unique and diverse group of individuals who are truly game changers in today’s society. How can banks do a better job engaging millennials as customers?
The Digital Banking Generation
What the teams discovered is that the digital generation’s perspective on banks is different in comparison to past generations–33% of millennials believe they will not need a physical bank at all, while 71% of millennials would rather go to a dentist than go inside a bank. However, what they do value is technology based banking–being able to access their accounts from their smartphone.
Also, because millennials are extremely tech savvy, they are more prone than any other group to prefer that their banks proactively recommend products and services and mobile banking services, to patronize companies that support causes they believe in, to be apt to try new technology, to be keen to share their opinions online, and sleep with mobile phones next to their beds!
Millennial Fun Facts
Earlier this year, the research firm CCG Catalyst tracked some behaviors with millennials and their relationship to banking.
The results showed:
- 46% use checkbooks
- 68% use online banking
- 44% send money online
- 39% use mobile remote deposit capture
- 46% use digital banking to pay bills online
- 91% chose PayPal app
- 16% chose Google Wallet
Millennials don’t necessarily dislike banks–they just want them to be better. A survey of 100 HBCU students from the BE Smart case competition showed that 33% of African American millennials want their bank to educate them on financial topics. They want banks to act as an “overall financial caretaker,” providing services such as secure accounts, file taxes, and offer options for saving for retirement. Millennials also want banks to advise them on how much to save and budget, in addition to being digitally accessible via a mobile or online channel, integrated into their cars and home appliances, and have the ability to pay bills automatically.