What Small-to-Midsize Financial Institutions Can

Learn From Millennials

Copyright 2016 CPI Card Group

Copyright 2016 CPI Card Group

Given millennials’ increasing spending potential, marketing to them has become the cause du jour for

numerous companies, including financial institutions.

According to a survey from Accenture released in late 2015, millennials are open to exploring options

when choosing their financial institutions. Per the survey, large regional or national banks had lost 16

percent of their millennial customer base in the previous 12 months, while local or community banks

witnessed a five-percent increase among that population (credit unions saw a three-percent increase).ii

While millennials may choose to go with larger financial institutions for various reasons, including those

institutions offering a wider range of products or fitting into customers’ longer term plans, other millennials

are responding to creative new programs that differentiate small-to-midsized banks and credit unions.

More good news for financial institutions is that the rapidly emerging concept of instant issuance plays

right into the needs and desires of the millennial audience segment. Instant issuance, simply put, means

providing payment cards (including credit, debit and prepaid cards) and other services instantly from

within a bank or credit union branch.

Hint: Instant IssuanceWould be Very Appealing

Millennials now comprise the majority of the working age

population in the U.S., according to The Wall Street Journal.i

Instant issuance plays right into the needs and desires of

the millennial audience segment

Ten years ago, instant issuance technology

was extremely complex and required heavy

investments in hardware and software as well as

lengthy integrations with core systems and card

processors. Additional expenses were incurred

due to required training to operate the system and

additional resources needed to support a secure

network with proper oversight.

Today’s technology has changed all that. Now

operating through a Software as a Service model,

instant issuance is scalable and easily integrated

with existing systems. Financial institutions use

their existing software to transfer data to a third-

party provider. The data is immediately processed

and converted into a print file that is returned to

the branch electronically. Small, desktop printers

encode the data and print the card quickly. In

addition to the lower cost of deployment, training

has been simplified and involves learning a single

process on a single machine versus multiple

processes for hardware, software and network

interaction.

For more information on CPI Card Group’s instant

issuance solution, Card@Once®,

visit: http://www.cpicardgroup.com/

our-solutions/instant-issuance/

Cards in Minutes

within minutes, receive a fully functioning, active payment card.

Instant card issuance enables account holders to walk into a branch and,

Copyright 2016 CPI Card Group

Millennial Lessons

There is much about how millennials think that can inform marketing related to instant issuance.

They want it NOW.

For starters, the key word within instant issuance is “instant.” A Huffington Post article by marketer Andy

Karuza is appropriately titled: “Millennials: Marketing for Instant Gratification.”iii A Boston Consulting Group

report noted that the generation places more value on speed and convenience than friendliness of service.iv

In an age when any answer is a Google search away and products can be delivered same-day within

certain cities, the beauty of new instant issuance products is they can be provided, well, in an instant.

Cash is still king.

A GoBankingRates survey completed in early

2016 noted that nearly 60 percent of millennials

still prefer to be paid in cash—despite significant

attention to electronic so-called person-to-person

(P2P) methods, such as those offered by Venmo and

PayPal.v The ongoing preference for cash means

millennials still rely on their debit cards. A service

that provides these vital instruments quickly and

conveniently would logically prove persuasive for

small-to-midsize financial institutions marketing to

younger audiences.

It’s all about making it MINE.

Many financial institutions are deploying other services alongside instant issuance that are appealing to

millennials. Chief among them is a custom-card capability, which allows users to develop their own unique

card designs. Via online portals that are extensions of websites provided by banks and credit unions,

users design their own debit cards and pick them up at their local branches.

An Emerging Millennial Offering: Instant Issuance for Prepaid

Copyright 2016 CPI Card Group

History tells us that interest in prepaid, loadable cards

is confined primarily to unbanked consumers. Well,

conventional wisdom has changed. CPI Card Group sees

a significant market for prepaid within the broad younger

consumer market. According to Business Insider, Gen X

and millennial consumers comprised 80 percent of U.S.

prepaid card owners in 2013.vi And the income levels

for these prepaid users vary. Twenty-seven percent of

millennial and Gen X prepaid card users earn more than

$100,000 per year.

Small-to-medium sized financial institutions could

offer prepaid cards instantly as an additional value-add

service. Such an offering would combine the popularity

of prepaid cards among millennials with the millennial

marketing advantages of instant issuance.

Credit Union Magazine highlighted this trend by

interviewing CPI Card Group’s Stacy Jensen, and the

resulting interview is available online.vii

Visit CPI Card Group’s website for additional white papers analyzing the appeal of instantly issued prepaid cards to

younger customers of financial institutions.

They are willing to reward those institutions that meet their needs.

Instant Issuance Brings Millennials into the Branch

Copyright 2016 CPI Card Group

The aforementioned millennial preference for cash

encourages younger customers to visit ATMs, so visiting a

local branch is not much of an additional burden. The ability

to create custom cards further encourages millennials to

drop in to the branch to retrieve a card order. And once in

the branch, the bank or credit union has an opportunity to

educate and introduce additional value-add services.

Alleviating concerns about EMV®-based transactions should

be a key point of emphasis during in-branch visits. Instant

issuance solutions produce chip-based cards; when a

customer retrieves them, branch employees should take the

opportunity to explain how EMV transactions work and why

the chip is important.

Security, in general, is top of mind for all consumers today,

given the prevalence of security breaches in the news. Many

branch customers will raise security concerns, especially

with regard to their debit cards. Instant issuance solutions

allow financial institutions to quickly address worries. Any

consumer questioning the security of their card data can

receive a new card—and a new card number—on the spot.

In addition, branch visits to pick up new physical cards

present opportunities to discuss other new offerings. One

example capitalizes on the increasing popularity of mobile

payment methods that utilize digital wallets on phones.

Financial institutions are offering services that procure

digital cards placed in a digital wallet, and these cards can be

procured concurrent to the procurement of physical cards

via an in-branch instant issuance solution. A digital card is

connected to the same account and the same credit card

number as the physical card.

Distilled down to the basics, the millennial desire is not

so different from that of any other consumer group.

Millennials want convenience, they expect financial

institutions to constantly provide new technologies

and services that make their lives easier, and they

are willing to reward those institutions that meet

their needs. The challenge is that this young and now

influential consumer audience is not used to waiting.

And they want products that are personalized.

Fortunately, with new services on the horizon from the

financial institutions, these needs can and will be met.

By counseling millennials on their digital offerings, financial

institutions can maintain a branding presence within digital

wallets, while heretofore such branding was ceded to

the mobile payment platform. While as noted millennials

currently prefer to pay each other in cash, the market

for electronic person-to-person transactions will expand.

Industry firm Ovum predicts “the total global transaction

value generated by P2P mobile money transfers will

increase from $15.22B in 2014 to $270.93B in 2019.”viii Of

note, the new digital card can be placed within the digital

wallet inherent to a phone’s operating system, or it can be

accessed via a bank’s existing mobile app.

Convenience & Innovation

Reap Rewards

EMV is a registered trademark or trademark of EMVCo LLC in the United States and other countries.

Copyright 2016 CPI Card Group

Sources

i Gellman, Lindsay; “Helping Bosses Decode Millennials—for $20,000 an hour,” The

Wall Street Journal, May 18, 2016.

ii “Banking Shaped by the Customer; 2015 North American Consumer Digital Banking

Survey,” by Accenture. Page 10. Accessed via Accenture microsite: https://www.

accenture.com/us-en/insight-consumer-banking-survey.

iii Karuza, Andy; “Millennials: Marketing For Instant Gratification,” Huffington Post,

December 30, 2015.

iv Barton, Christine; Fromm, Jeff; and Egan, Chris; “The Millennial Consumer;

Debunking Stereotypes,” Bcg.perspectives online blog, April 16, 2012, chapter 3.

v “For Millennials, Cash is Still King,” eMarketer, March 9, 2016.

vi Bakker, Evan; “The rise of reloadable prepaid cards could affect the way millennials

approach banking,” Business Insider, April 24, 2016.

vii “Millennials, underbanked drive prepaid card growth,” Credit Union Magazine,

June 10, 2016. Available online at: http://news.cuna.org/articles/110402-millennials-

underbanked-drive-prepaid-card-growth.

viii Zoller, Eden; “Disruption and Innovation ahead for P2P mobile money transfers,”

Ovum, February 25, 2016. Accessed via Ovum online. Link: http://www.ovum.com/

press_releases/disruption-and-innovation-ahead-for-p2p-mobile-money-transfers/

www.cpicardgroup.com U.S. 1-800-446-5036 Canada 905-761-8222 U.K. +44 (0)1206 845555 2016 CPI Card Group