Find out how your brand can create the right emotional connection for Millennials Millennials are entering an important life stage for banks, as this segment of the population is starting to build wealth while driving potential sales growth in financial products and services. This segment tends to use more primary banking products than Baby Boomers and carry a higher minimum balance in their checking accounts. An additional reason for the increased focus on this segment is based on the rapid growth in size versus other cohorts such as Baby Boomers. This study will translate the many research documents into an ideal Millennial Experience (MX) for the banking industry through our Omni Experience Model and will help define the role of physical branches versus online. http://www.sld.com

1. !
October | 2014
Banking onthe Millennial
Experience (MX)
Creating the right emotional connection for Millennials
Research Paper

2. !
Think BlinkAt Shikatani Lacroix, we design compelling at-purchase
moments that connect in the blink of an eye. Our philosophy
and strategic design approach, Think Blink, is driven by a
consumer’s motivation to make a purchase decision. Everything
we do is geared to owning the “at-purchase” moment. Our firm
has a well-earned reputation for designing integrated brand
experiences that effectively connect brands with consumers to
drive measurable results for clients.
!
About the author
Jean-Pierre Lacroix, R.G.D., President and Founder of
Shikatani Lacroix
Jean-Pierre (JP) Lacroix provides leadership and direction to his
firm, which was founded in 1990. He has spent the last 30 years
helping organizations better connect their brands with consumers
in ways that impact the overall performance of their business. In
1990, Mr. Lacroix was the first to coin and trademark the statement
“The Blink Factor”, which today is a cornerstone principle of how
brands succeed in the marketplace. JP has authored several
papers, has been quoted in numerous branding and design articles,
and in 2001 he co-authored the book “The Business of Graphic
Design” which has sold over 10,000 copies. JP can be reached at
jplacroix@sld.com and you can follow his thought leadership
webinars at: www.sldesignlounge.com.
!
Other Articles and Book
Organizational brand coherence, 2013
Design visualization, 2013
Beyond the middle: Creating value for private label brands, 2012
Retail trends in banking, 2012
Packaging in an online world, 2011
Belonging Experiences: Designing Engaged Brands, 2010
| Banking on the MX Experience | October, 20142

3. Understanding Millennials
!
Millennials are entering an important life stage for banks, as this
segment of the population is starting to build wealth while driving
potential sales growth in financial products and services. This
segment tends to use more primary banking products than Baby
Boomers and carry a higher minimum balance in their checking
accounts. An additional reason for the increased focus on this
segment is based on the rapid growth in size versus other cohorts
such as Baby Boomers. This study will translate the many research
documents into an ideal Milennial Experience (MX) for the
banking industry through our Omni Experience Model and will
help define the role of physical branches versus online.
!
The Millennial population is now 7% larger than their Boomer
predecessors, with more than 79 million consumers versus
Boomers at 76 million. Although by 2030, the Millennial the
population will have declined slightly to 78 million, it will have
distanced itself quite significantly from the declining Boomer
generation, with an estimated 56 million consumers by that date.
The Millennial generation are the first cohort where social media
and online technologies form an integral part of how they interact
with society and friends, from the wisdom of communities,
crowdsourcing, and the DIY culture. Millennials also see
themselves at the centre of self-created digital networks through
the use of selfies, blogs and sharing their everyday life online, with
55% indicating they have posted a “selfie” on a social media site
(Pew Research 2014).
!
For the banking industry, based on a FICO 2014 study, this
segment will be less loyal to their primary banks than previous
generations and are 50% more likely to close all accounts with
their primary bank than their older cohorts, providing a significant
level of volatility in the marketplace. The key drivers for Millennials
to switch are based on the perceived high fees, ATM issues and
negative experiences as they relate to conflict resolutions, many
of which are resolved in physical branches.
!
| Banking on the MX Experience | October, 20143
Introduction
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!
The Millennial Generation !
Born: After 1980 !
Age of adults in 2014: 18 to 33* !
Share of adult population: 27%
Share non-Hispanic white: 57% !
Ind 50%; Dem 27%; Rep 17%
!
Generation X !
Born: 1965 to 1980 !
Age in 2014: 34 to 49 !
Share of adult population: 27%
Share non-Hispanic white: 61% !
Ind 39%; Dem 32%; Rep 21%
!
The Baby Boom Generation !
Born: 1946 to 1964
Age in 2014: 50 to 68
Share of adult population: 32%
Share non-Hispanic white: 72% !
Ind 37%; Dem 32%; Rep 25%
!
The Silent Generation !
Born: 1928 to 1945 !
Age in 2014: 69 to 86 !
Share of adult population: 12%
Share non-Hispanic white: 79% !
Dem 34%; Ind 32%; Rep 29%
!
!March 2013 Current Population Survey (IPUMS) and
Pew Research surveys, January and February 2014
!

4. The study clearly identifies that more than 68% of Millennials have
a national bank for their primary financial institution, followed by
credit unions at 15% and regional banks at 9%. This is supported
by a J.D. Powers 2014 banking tracking study which identified Gen
Y and Gen X Affluent and Emerging Affluent cohorts experience
significantly more pricing and fee-related problems driving the
highest incidence of bank switching within all banking cohorts to
more than 45%. Although the study identified banks continue to
improve in minimizing problems down to 14% from 26% for the big
banks, this remains a major issue driving the switching behaviour
of Millennials.
!
!
Statistics on Millennials
In addition to demonstrating significant differences in how they
choose to stay connected, Millennials will challenge banks as they
demonstrate quite different values and behaviour from their
predecessors, based on the recent blog “74 Of The Most
Interesting Facts About The Millennial Generation” by Dan
Schawbel and a more recent Pew Research Center 2014 study,
namely:
• Just 26% of this generation is married. When they were the age
that Millennials are now, 36% of Generation X, 48% of Baby
Boomers and 65% of the members of the Silent Generation were
married. (U.S. Census)
• 89% of Millennials would prefer to choose when and where they
work rather than being placed in a 9-to-5 position. [Odesk]
• Average tenure for Millennials is 2 years, compared to 5 years for
Gen X and 7 years for Baby Boomers. [Pay Scale / Millennial
Branding]
• The average member of Gen Y carries $45,000 in debt.
• By next year, Millennials will account for 36% of the U.S.
workforce and by 2025, they will account for 75% of the global
workplace. [U.S. Bureau of Labor Statistics / The Business and
Professional Women's Foundation]
• By 2015, their annual spending is expected to be $2.45 trillion
and by 2018, they will eclipse Boomers in spending power at
$3.39 trillion. [Oracle]
!
| Banking on the MX Experience | October, 20144
“The Millennial
generation is forging a
distinctive path into
adulthood. Now ranging
in age from 18 to 33, they
are relatively unattached
to organized politics and
religion, linked by social
media, burdened by debt,
distrustful of people, in no
rush to marry— and
optimistic about the
future. ”
!
-PewResearch Center Study,
March 2014

5. A three-year study from Scratch (Millennial Disruption Index), an
in-house unit of Viacom further supports the FICOM and JP
Powers studies on the impact Millennials will have on banking,
namely:
• 53% don’t think their bank offers anything different than other
banks
• 1 in 3 say they are switching banks in the next 90 days
• 71% would rather go to the dentist than listen to what their
banks are saying
• 33% believe they won’t need a bank at all in the future
• Nearly half are looking for tech start-ups to overhaul banking
• 73% would be more excited about a new offering from Google,
Amazon, Apple, Paypal or Square than from their own bank
!
!
Leveraging the ideal Millennial Experience
Model (MX)
!
The key questions for banks is how will this impact their
conventional bricks and mortar channel of distribution and where
best to create an ideal Millennial Experience (MX). To help put
into context all of the available information on Millennials on
how this impacts building a stronger banking experience, we
have leveraged our unique Omni Experience Model. This will
effectively align how Millennial needs and priorities match
those of a financial institution as part of a coherent and
integrated Millennial Experience (MX).
!
To provide financial institutions with a link between the wide
range of statistics and potential actionable foresight, we have
based our analysis around how consumers build affinity with
brands based on 35 years of mapping and managing
transformational experience for both financial institutions and
retailers.
| Banking on the MX Experience | October, 20145
“Banking is widely
viewed as simply a
transactional activity, but
people are seeking advice
and relationships that
improve their financial
well-being.”
!
- Robert Mulhall, Managing Director,
Accenture Distribution and Marketing
Services

6. Creating Meaningful MX Alignment
!
!
!
!
!
!
!
!
An ideal MX must align with both Millennial needs and
priorities with those of the financial institution in order to
deliver an ideal omni experience that will be sustainable and
meet the needs of both banks and consumers. As noted in the
above diagram, the model takes into account both needs and
priorities, namely:
!
• Millennial Needs: The key drivers of the category, leveraging
the ideal Millennial path to purchase and buying needs. For
Millennials, although the online experience is critical for how
they want to interact with banks, 26% prefer mobile apps,
compared to 12% for Gen X and 3% for Boomers. However,
Millenials still prefer to use a bank’s website over mobile
apps.
The FICO study also identified that although access for a
mobile app for banking was very important, only 21% were
aware that their current bank offered a mobile platform,
providing an opportunity for banks to better promote their
online and app platforms.
!
| Banking on the MX Experience | October, 20146
Customer needs
Customer priorities
Company needs
Company priorities
Company position and
identity
Company context and
environment
Customer
brand
experience
factors
Company
brand
experience
factors
Branded'Experience'matches'customer'hidden'needs Branded'Experience'matches'company'growth'needs
Branded'engagement'and'support'matches'brand'valueCustomer'brand'engagement'supports'desired'behavior
Experience

7. • Mobile app usage clearly translates into loyalty for
Millennials. Banks should build and enhance mobile
application functionality and learn how to effectively
communicate that functionality to users. Physical branches,
although declining in value, still remain an important factor in
building relationships. Based on a recent TD Bank study,
Millennials reported that they are still visiting bank branches
as frequently as they did last year, mostly to deposit or
withdraw money. Those who do their banking in a branch
feel it is more secure and enjoy the in-person service.
The various studies identify the following needs that help
build an ideal MX, namely:
• Receive real-time analytics of their spending, including
safe-to-spend forecasts
• Receive recommendations on products or services that
they might need
• Seamless experience across channels and platforms
• Able to bank on their time
• Gain advice as they do not feel financial prepared
• Willing to trade financial return for greater social impact
• Desire to connect and contribute to their community
• Transparency and authenticity
• Instant issue debit cards and prepaid cards
!
• Millennial Priorities: Millennial priorities are the key
foundation for creating a strong brand experience and reflect
the emotive and cognitive unmet need states of this
segment. Since this segment is paying off education loans
and starting to earn wages, their priorities around banks are
therefore centred on:
• A seamless and simpler access to their accounts, bill pay,
e-statements and person to person money transfers,
while eliminating reliance on paper transactions
• Personal, proactive and personalized advise on
budgeting and setting financial goals
• The ability to bank with a financial institution that reflects
their self-image and values in the community
• Positive banking experience with lower fee cost
!
| Banking on the MX Experience | October, 20147
"Millennials need to feel
empowered to reach out to
their bank and have their
questions answered so they
become more confident
about their financial
futures.”
!
- Nandita Bakhshi, Executive Vice
President, Retail Distribution and
Product, TD Bank

8. • MX Factors: Identifies the ideal Millennial branded experience
which builds on their priorities and needs. The factors consist
of a set of specific criteria to ensure the overall brand
experience meets the expectations and needs of customers.
For Millennials, the MX factor can be summed up in the
following statement:
!
Seamless and coherent personal experience where they
have access on their terms for timely advice and
proactive services that reflect their values and lifestyle
needs.
!
!
• Financial Institution Needs: On the opposite side of the
experience model, it’s necessary to identify the needs of
banks or brand in order for it to prosper and grow in the
marketplace. For the purpose of our research, we have
identified needs that align with some of the challenges of the
industry, namely:
• Increase relevancy amongst Millennials of both banks and
their branch network
• Identify efficiencies which would drive lower margin and
cost services to online experiences while incurring higher
customer engagement
• Overcome negative perceptions of financial institutions
• Provide a cost effective approach to delivering
personalized services
• Improve conflict resolution scores as this is one of the key
drivers for brand switching
!
!
!
!
!
| Banking on the MX Experience | October, 20148

9. • Financial Institution Priorities: Priorities, or strategic
imperatives, are the critical strategies to overcome the
challenges and capitalize on the opportunities. For the
banking industry to drive growth amongst Millennial cohorts,
the priorities would consist of the following:
• Adapt the current delivery system and channel strategy
to appeal to Millennials (ATM, Mobile, Online, Branches)
• Provide more transparency and authenticity (greater
disclosure of loan terms and community involvement)
• Create efficiencies within the system while driving 1:1
interactions to drive higher margin transactions and sales
• Position banks as the trusted and reliable platform to
access funds and investments
!
• Company Brand Experience Factors: Similar to the customer
side of the equation, these factors identify the criteria
required for the brand experience to succeed from an
organizational and company perspective. The MX needs to
match the company growth requirements while also
matching the engagement to the organizational brand value.
For the Millennials, the bank’s brand experience factors can
be summed up in the following:
!
Seamless and coherent efficient experience where the
bank derives the greatest amount of affinity and
revenue from Millennials, while creating significant
differentiation from other FIs and disruptive financial
offerings
!
• Ideal MX: The alignment of the company and Millennial brand
experience is created through joining the factors for the
given cohort and the company branded experiences. These
experiences are filtered through a lens which leverages a
company’s context, environment, position and identity.
Ultimately, the ideal omni experience identifies the value the
physical experience delivers to both the consumer and the
organization.
| Banking on the MX Experience | October, 20149

10.
For the purpose of our model, we have grouped the banking
industry as a combined identity, understanding that national,
regional, and community banks would have different
business and branding dynamics. In order to make the value
proposition actionable, tactics are grouped around our three
levers of engagement: message, structure and process.
!
Message: Overall, the ideal MX platform will need to speak to
the specific needs of Millennials to minimize switching and
increase brand advocacy, namely:
!
• Understand that although Millennials have been
categorized as one group, they represent two distinct
segments, namely: those between the ages of 18 to 24
who are starting out; and those that are 25 to 34 who are
starting a career, a family and building equity
• Mirror their aspirational needs to contribute to society
and their community
• Share their values in being empowered and
knowledgeable to make the right decisions
• Messaging needs to reinforce transparency with all costs
clearly identified
• Personal customer interaction and attention, specifically
to fee waivers, overdrafts and authorization
• Proactive analytics to avoid potential conflict issues such
as authorizations and overdrafts
• Coherent and seamless across the various online, mobile
and physical platforms, while leveraging offers and
messages that appeal to their specific needs
• Provide insights and knowledge to allow Millennials to
feel confident in their financial decisions
• Communicate more effectively on mobile app capabilities
!
| Banking on the MX Experience | October, 201410

11. Structure: Creating an inclusive community experience that
supports their priorities for feeling confident in their decisions,
while receiving personalized services as part of offline and
online channels.
• Marketing needs to fully leverage social media, television
ads and word-of-mouth recommendations as these are
preferred communication channels
• Develop an integrated and easy to use mobile (including
texting) and online banking experience
• Target key offerings and services around life events such
as changing jobs, getting married, moving, buying a
home or car, or starting a small business
• Create more intimate and convenient branch experiences
that provide access to the latest in technology and more
personal/private banking experiences
• Locate branches within Millennials’ communities,
primarily urban in focus
• Multi-tier channel strategy with a greater number of
easily accessible self-serve ATMs, video ATMS and drive-
thru, in addition to smaller, more convenient branches
!
Process: Creating a seamless and coherent experience that
allows for a tiered level of engagement and convenient access
to knowledge.
• Increase branch service, specifically reducing wait times
to 4 minutes or less and being offered additional
assistance
• Provide a higher degree of personalized service, such as
being greeted and recognized upon entering, knowing
the customer by name and being thanked for banking
• Paperless and digital banking transaction experience to
reduce the number of required visits to a branch for loan
approvals, opening new accounts and bill payment
• Stronger use of Universal Bankers to manage all parts of
the Millennial financial requirements
| Banking on the MX Experience | October, 201411

12. • A higher degree of privacy throughout the branch
experience
• Proactive and analytically-based approval systems that
speeds up service while reducing the complexity of
opening an account and loan and credit card approvals
• Stronger service system and culture for conflict
resolutions
!
Conclusion
Millennials provide banks with a continued growth opportunity
as this cohort tend to use primary banking products more than
Boomers and carry a higher minimum balance in their checking
accounts. They also tend to become advocates for institutions
that treat them with respect and understand their needs in
reducing their financial stress and confusion. This segment is also
open to allowing banks to migrate lower margin transactions to
mobile and online platforms and value physical branches as a
place to build relationships and resolve issues. Creating an
ultimate MX coherent strategy will allow banks to build a strong
affinity with the future wealth generators who will easily
outnumber the current Boomer generation over time.
| Banking on the MX Experience | October, 201412