By bridging the gap between the social networks where Millennials spend most of their time and mobile banking applications, banks fit in with Millennial lifestyles and send a clear message to customers that they are important and understood.
A hunger for instant, seamless and contextual experiences
Millennials have grown up during a digital age defined by smartphones, social media and the instant availability of information and services. With immediate access to almost everything, Millennials have come to expect a level of convenience far greater than generations that preceded them.
Out of the variety of digital devices available, smartphones lead the way for millennials as an indispensable part of modern living where uninterrupted connectivity is a necessity. In a comprehensive Vocalink research survey of 5,027 US Millennials, 98% of respondents were found to use a smartphone while 69% said they couldn’t live without their mobile device.
Despite engaging with a broad range of mobile applications, social and entertainment content, owned by a few of the largest Internet companies dominate engagement. Facebook’s flagship mobile app followed closely by Facebook Messenger lead all others in total engagement and audience reach among millennials. Snapchat and Whatsapp also has impressive engagement data.
Mobile P2P money transfers on the rise
As millennials spend countless hours on their mobiles socialising with their peers, smartphones are becoming an increasingly popular platform to make P2P money transfers. According to BI Intelligence forecasts, mobile P2P will grow to $174 billion or 30% of total P2P payment volume by 2020, up from $5.6 billion, or just 1% in 2014. In the UK, P2P payments have surpassed innovation and early stages of adoption and are now in the early majority stage at 34%.
Non-bank competitors loom large
Recognising a growing millennial demand for immediate and contextual transfer solutions, a host of non-traditional players have begun to move into the market. New P2P providers have reached staggering success in a relatively short period. Market leader Venmo is on track to process $20 billion in payments per year.
In addition to a number of new dedicated P2P providers moving into the market, many of the world’s largest social media companies are also entering the space. Social media giants like Facebook and Snapchat are utilising their large millennial user bases to deliver instant and contextual payment experiences where millennials spend most of their time.
Search giants Google have also moved into the market. In 2015, Google Wallet relaunched with a specific focus on mobile P2P money transfers. Apple recently announced that users will be able to send money to their friends via iMessage as well.
Adapt quickly or lose a generation of customers
Increased competition from new dedicated P2P providers, technology companies and social media giants combined with growing millennial demand mean banks must act quickly to adapt their mobile P2P transfer offerings.
Current P2P facilities offered by mobile banking apps are counterintuitive, out of context and require a number of information fields to be filled out, making them unappealing to millennial lifestyles. When compared to the instant, convenient and contextual transfer solutions now offered by non-traditional P2P providers, P2P banking facilities are no match.
Banks must either adapt to millennial demands or lose out on a growing mobile P2P transfer market and a strategically important generation of customers.
The future of P2P payments is social
While the non-traditional finance revolution has already begun, banks still have the option to make their mark. By providing millennial customers with mobile P2P transfer facilities where they spend most of their time – engaged in social media and messaging, the payment experience becomes intuitive, contextual and simple.
Banks that bridge the gap between social networks and their mobile banking applications can regain P2P transactions lost to new competitors and secure loyal millennial customers into the future.