How banks are missing the “millennials” mark?

“Banking is essential, banks are not,” Bill Gates, then CEO of Microsoft, famously said in 1994.Mobile phones, however, are essential. And many of us today are doing a majority of our banking transactions on the mobile.

Forrester had this interesting thought –“The moments that characterize the mobile mind shift are getting shorter. Simple triggers — messages, sounds, even tactile sensations — spur consumers to take action, both on devices and in the real world”. Forrester defines this quick-reaction subset of mobile moments as micro moments

Millennials are digital natives — the first generation to have grown up with Internet-enabled devices and digital technologies — and they expect real time engagement with brands.

According to a study by Viacom Media, banking, as an industry, runs the highest risk for disruption. 53% of the Millennials they surveyed said they didn’t think their bank offered anything different than a competing bank. 71% said they would rather visit the dentist than hear what banks have to say. 73% would rather handle their financial services needs with Google, Amazon, Apple, PayPal or Square than from their own nationwide bank

India has a strikingly young population, especially compared to China. It has 440mn Millennials, larger than China (415mn)

Forrester estimates an increase in Indian smartphone subscribers to 286.3 million in 2016 — an annual compound growth rate of 61.25% since 2010

The increasing popularity of mobile payment platforms such as Venmo and Apple Pay, among millennials in particular, should be cause for concern

So what must banks do to engage better with the Millenials:

  1. Become “Gurus”

Financial marketers have a clear opportunity to become financial gurus to Millennials. This generation is hungry for knowledge, is ready to learn digitally, and would prefer simple, easy to understand content to make better decisions about their lives.

Bank of America’s initiative “Better Money habits” launched in collaboration with the non-profit Khan Academy is one of the examples of interactive education resources targeted at the Millennials.

  1. “To service is to sell” will be the new philosophy. Banks will leverage the rich customer data to “service first” , rather than sell. Sales will happen because banks anticipate service moments that lead to a sale. This will need large technology investments for banks to sense “customer moments” in real time & respond to them. Millenials will demand that.

Again research shows that “marketers will build their own contextual marketing engines to connect with customers not through campaigns, but through ongoing interactions. To do so, they will have to combine systems of insight and systems of engagement”. Marketing in banks tends to be “push” based, I think it needs to transform to a “customer pull” paradigm.

  1. Think ‘Outside the Bank’

Millennials are the experiential generation. They focus on today’s needs and take on debt for vacations, relocation or education. Research from Facebook IQ has shown that Millennials tend to show off not through the ownership of things but through experiences.

How can financial marketers leverage this knowledge to bring an “experience edge” to their marketing. American Express provides its members with livestreaming concerts on its unstaged website, and Chase treats some of its Sapphire cardholders with VIP access to music shows who can then share their experiences via social media.

None of this is new & brands should find more exciting partnerships – with writers, photographers, designers, social sector leaders, and other influencers. Research shows that “Such collaborations could result in storytelling initiatives with advice on different experiential topics in connection with financial matters behind them. Communications should be built not so much around a transaction, but rather all the exciting things you can do with it”.

  1. Embed analytics into Mobile banking: Show customers an accurate forecast for their spending.

Mobile banking can do far more for customers. They have the data to help me live better.

DBS digibank leads in the Indian market with its budgeting and spending tool. This allows customers to manually categorize transactions and autopopulate transactions like bill payments; they can also choose to receive email alerts when they hit 70% to 90% of their budget. DBS digibank also provides a basic saving tool to enable customers to assess their spending and save money. In terms of advice and planning, ICICI Bank offers customers a few useful tools, such as calculators for mortgage payments, investments, and pensions.

Mobile banking offers the opportunity to cross-sell to existing customers and to promote additional services. Most banks have real time data & yet most banks don’t use this data to help build a better “context”. Most banks don’t use the context of a customer’s current product portfolio, recent life events, location, past behavior, and other factors to offer personalized marketing in their mobile apps.

Leave a Reply

Your email address will not be published. Required fields are marked *