Respecting Millennials and Their Data Privacy Expectations
What’s the most valuable audience? Your existing one, of course! But to expand, many financial services companies are pursuing millennials; in broad terms, they haven’t locked in their choices yet, they have their largest spending years ahead of them and they are a huge market opportunity. For example, millennials (age 18-34 in 2015) are now the largest generation in the US and they’re inline to inherit 30 trillion dollars.
So, how do you sell to millennials, what adaptations to do you need to make to your processes to appeal to this generation? As a new FB insights report — Millennials + money: The unfiltered journey — states, “winning over the millennial generation will require a transformative overhaul.”
One critical factor is how you handle their personal information; Generation Y (another name for millennials) are reluctant to share their personal information and over 25% have no trust that retailers or mobile wallet providers will keep their information secure. Sixty-nine percent worry about identity theft and data breaches, a significant hurdle to overcome for anyone who wants their digital business.
Generation Y are also not tolerant to friction in the account opening process. One out of 3 will terminate an account opening if they are uncomfortable with the information request. Other major stumbling blocks to completing an account opening include requesting too much information, too many steps and too long a process. Surprisingly, for this tech-literate audience, 60% still prefer to open a bank account in person.
Balancing Trust and Friction
Fintech solutions, which aim to increase trust and decrease friction, have their work cut out for them. The question is, how do you create trust without burdening the audience by demanding too much PII (personally identifiable information)? PII is necessary for compliance reasons and to ensure the trust that is so valuable to the millennials.
There is a “significant disconnect between the concerns of millennials and the information businesses need to ensure financial transparency,” said Thomas C. Brown, Senior Vice President, U.S. Commercial Markets and Global Market Development, LexisNexis Solutions.
One step is for consumer education. “The general discomfort millennials are expressing with information sharing, beyond a couple of the most basic data points, shines a light on the need to educate this major and growing portion of the consumer population,” said Kimberly Little Sutherland, Senior Director of Fraud Management for LexisNexis Solutions.
Businesses need to give clear reasons and policies for the information they need to collect and how they handle it. Perhaps Privacy Policies with a tl;dr (too long; didn’t read) excerpt will assuage fears and provide an opportunity to grow trust?
Education offers many more ways to grow trust, from funny, informative videos to contextual information besides each form input. As opposed to being strictly a legal necessity, identity disclosures can be a way to build trust, connection and a company’s brand.
Stronger Primary Identity Verification
A bigger step is to do a fundamental reexamination of the information necessary to open and maintain accounts in the first place. What is the least amount of PII that a business can collect, while maintaining compliance and fraud protection standards?
“To mitigate risk and balance consumer expectations, companies looking to enhance the customer experience and improve friction must learn to ask for only the data they need,” said Sutherland.
The key is to ask for the right information and ensure its accuracy. Focusing on strong primary identity verification reduces the need for secondary PII and makes the onboarding process smoother. It appeals to millennials desire to limit the amount of information that is shared, reducing the number of steps and the time it takes to fill the necessary forms.
For the compliance team, focusing on strong primary identity verification does not mean less compliance. In many cases the information requested is never used anyways and just collected due to legacy requirements. With modern-era identity verification services (such as Trulioo), multiple data points are matched to multiple reliable and independent sources, ensuring that risk of fraud and money-laundering activities are kept in check.
The benefits of strong primary identity verification don’t stop with Generation Y, of course. All potential users want quick, simple onboarding, and their confidential information kept secure. But millennials, with their quick adoption of technologies, seek out the best digital experiences. By providing this tech-savvy audience with a fluid onboarding experience that satisfies their data privacy expectations, companies will earn their trust and win their business.