How Citizens Bank is reaching millennials

Citizens Bank is selling millennials a comfortable, enjoyable life of travel, adventure and everything short of avocado toast in an effort to grow its student loan refinancing business. In order for the Providence, Rhode Island bank to reach millennials, it needs ads that speak to what they want: balance across their personal, professional and financial lives, according to Lori Dillon, Citizens' director of Brand, advertising and consumer strategy. "We highlight the savings they can get on their monthly payments and what they can do with it," like traveling and other experiences, Dillon said. Similarly, SoFi ran a "Relax and Refi" campaign last fall that focused on addressing borrowers' anxiety over paying off loans. Citizens' approach is to target its major markets like Boston, Philadelphia and Pittsburgh, with television, direct mail and digital ads, with the objective to build a following based on brand trust. Ads feature employees to convey Citizens' community approach and the ability to talk to someone, a feature Dillon said millennials want. Citizens is watching what startups like SoFi and Varo Money are doing, positioning itself as a trusted brand that customers can call on for all aspects of their financial lives, even beyond loans. Banks often struggle to for brand affinity among millennials. So switching to a tech company with a younger look and feel can be a compelling draw, amping up the pressure on banks to demonstrate the value they can bring to the table for younger customers. Banks traditionally have steered clear of student loan refinancing, though Citizens has been in the space for four years. Underwriting younger, less creditworthy borrowers is risky, and to set up a new line of business requires capital and people. But Citizens sees a big opportunity to use student loans as a gateway to other products, like SoFi and BankMobile have done. It's "good business for high-FICO or low credit risk customers [and] serves as an entry point at a moment of flux in young adults' lives where they may be open to changing or establishing new banking and financial services relationships," said Jason Mikula, director of digital marketing at Future Finance. "Refi is SoFi's entry point for cross selling the rest of its products -- personal loans, mortgages, wealth management." While startups like CommonBond and SoFi hold networking events, Dillon said Citizens is highlighting the ability to create a human relationship with the customer. "It's making sure people have a balance, like 'Mark is still here if you need him,'" she said. "Millennials still like to make that affirmation with someone in person." She declined to comment on whether or not the bank would host similar events, but she and her team have taken notice of their peers.   At the end of 2017, Citizens' student loan book was valued at $8.1 billion, according to the company. It's a space which startups have forged a path, with CommonBond funding $1.5 billion loans since it was founded in 2012, and the value of SoFi's student loan originations at $14 billion. Still, banks have unique advantages when it comes to the student loan refinance market, like a strong resource base to invest in marketing, and a book of business based on deposit products that lowers their costs. "Banks have a strong cost of capital advantage over marketplace or balance sheet lenders," said Supermoney CEO Miron Lulic. "This gives them a significant competitive advantage in their product offering to consumers as well as their ability to invest in customer acquisition."