How Banks Can Use Technology to Capture the Millennial Market
For the YOLO [You Only Live Once] generation their smartphones have become the new wallets.
Photo Credit : impactguru.com,
India is one of the world’s youngest countries with a millennial population numbered about 440 million, which is greater than the entire working population of both the United States and Western Europe. Millennials [typically those aged 18 to 34] make up 46 percent of the workforce and are estimated to contribute to 70 percent of the total household income in Asia’s third largest economy.
These young adults have grown up in a time of mobility and have embraced the digital way of life. With access to information at an unprecedented scale, aided by the rapid penetration of Internet in India, they are all set to propel the banking industry onto a whole new trajectory in the near future.
How millennials view banking
Having grown up in the shadow of global recession, they also have a general distrust towards traditional financial institutions and are flocking to the highly digitized and customized offerings of fintech companies to address their financial needs.
Consequently, banks must work hard to regain their trust and demonstrate the value they add. Incorporating technology into new offerings will give organizations the leg-up they need to remain competitive and relevant as customer expectations continue to evolve.
Here are some of the key digital engagement strategies to build lasting customer relationships with millennials:
Give mobile-first a boost
Millennials live their lives on their smartphones, with a whopping 84 percent of them in India already reliant on mobile broadband, spending an average of 17 hours a week glued online. These digital natives are speed demons and want banks to meet their 24X7 digital demands with the automation and speed to bank in their spare time. They expect even traditional branch-only-services, like depositing checks, opening account etc. to be available on their smartphones.
Banks need to incorporate a number of new technologies like biometrics and artificial intelligence to efficiently meet millennial needs through mobile banking platforms. For instance, a biometrics-enabled customer identification program can provide a paperless and signature-less account opening service to customers. Similarly an AI powered virtual assistant can generate answers to questions like “Hey, what’s my current account balance?”
In the utopian millennial world, absolutely everything has to happen through the mobile. Money transfer should be possible in ten seconds - without the need to navigate through ten different screens. Similarly, for somebody seeking help, a banker should be available instantly at the click of a button. A menu with a host of generic services may not be enough to lure them; they would need a focused set of highly relevant services designed “just for you”. Banks have to develop the user experience and product quality necessary to let these tech savvy customers maximize the capabilities of their advanced mobile device and make everyday tasks simpler and more convenient.
Survive the digital payments jungle
A Google-BCG report estimates digital payments industry in India to touch $500 billion by 2020 spurred by smartphone penetration.
For the YOLO [You Only Live Once] generation their smartphones have become the new wallets. The mobile device can do everything from credit and debit card-based mobile payments to storing coupons and loyalty programs. And they expect banks to be the omnipresent hand that facilitates a shopping spree on Amazon through a one click purchase, or helps them split restaurant bills and link up with friends to send money on the go as seamlessly as possible. Alternative payment providers like Paytm and Mobikwik have already begun stealing wallet share away from banks.
As behaviors shift, banks need to be agile and ready to move, and differentiate themselves with rapid innovation in the payments space as well as greater integration of banking services with other apps and services. With the growing acceptance of P2P, they must now provide a wealth of innovative, new services that complement their existing online bill pay and money transfer services.
Bank on personalization
As one of the most data-intensive industries, there is an opportunity for banks to customize the whole customer experience. The digitally native ways of millennials give us more insight into their needs and wants than any previous generation.
Big data and analytics can be leveraged to extract insights into how customers’ lives are changing and predict what they want even before they know what they want. Is it time for college tuition, a new house, a foreign holiday, or for a different kind of checking account? Banks can use these insights to personalize messages and offers and create highly targeted cross-selling offers that hit the mark with millennials.
Financial institutions can also build new, targeted and effective loyalty initiatives with the help of the right data. They can leverage their rich data reserves to craft implicit loyalty initiatives such as contextualized advice, matching donations or services like merchant-funded offers in addition to their points based explicit loyalty activities comprising giveaways or rewards.
Millennials seek trust from their banks. A robust framework of technology integrating omnipresent mobile, amplified social connectivity, contextualized analytics and a scalable cloud would help banks crack the digital banking code for millennials and put customer outcomes at the forefront making banks their trusted advisor in the long run.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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