“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 national bank.
India has a strikingly young population, especially compared to China. It has 440mn Millennials, larger than China (415mn).
So what must banks do to engage better with the Millennials :
- “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 appropriate technology investments for banks to sense “customer moments” in real time & respond to them. Millennials will demand that. Customer service may completely morph with Marketing into a Customer Experience function. More importantly banks will need to control their “push selling” paradigm. Regulators may help by mandating an end to “mis- selling” …but that may not happen anytime soon. More progressive banks will regulate themselves & move to this new philosophy! Banks have huge data that signifies a “service need moment”-eg providing an NOC to an auto loan customer without any follow up. Also picking up a credit card airline transaction & converting that to a bunch of “partner privileges & offers for that country”.
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”. So the mass & blast campaign management will change & instead much more relevant service based messaging will engage customers.
2. 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. But this content has to be created to connect to Millennials.
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. http://bit.ly/1xce4Uv
3.Think ‘Outside the Bank’
Millennials are the experiential generation. They focus on today’s needs and take on debt for vacations 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 live streaming 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, Theatre artists, 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”.
4. Tear down the silos
Define, and start executing an overall payment strategy. Not only is responsibility for payments split between retail and business banking teams, but even credit cards and debit cards are often run by separate teams. Marketing tends to be a central team but may not have as much authority across silos to own a consistent communication paradigm.
5. Embed analytics into Mobile banking:
Help customers see an accurate forecast for their spending. 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. “Yet few banks 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”.