Digital technology is core to the Millennial lifestyle. The Pew Research Center labeled Millennials as “Digital natives in a land of digital immigrants.”
Millennials put banks in a unique situation. This demographic, more than any other seeks genuine partnerships that deliver value and they’re open to whoever provides it. Three out of five Millennials expect their bank to be a financial partner, according to Facebook. While the last fifty years of banking have been transactional, the future must be personal and experiential once again, built on a strong foundation of trust.
To build long-term relationships with Gen Y, banks need to proactively engage with them at an emotional level through personalized banking and provide them with the tools and guidance necessary to move the needle on their current financial situation as they hit major life milestones such as marriage, buying a home and having a first child. The non-tangible belief that a bank prioritizes its customer’s financial wellbeing is key to gaining their loyalty.
Let’s look at how today’s banks are extending their value proposition to deepen relationships with Millennials.
Ally Bank and Wells Fargo Put Personalized Financial Advisors into Millennials’ Hands
There has never been a better time for banks to evolve from helping Millennials move their money to helping them manage their money. As this generation faces major financial decisions for the first time — from paying down student loans or understanding a credit score to buying a house, they seek financial guidance from their banks.
However, saving and planning for the future is not something a tech-savvy Millennial would sit down and do — it needs to be woven seamlessly into their everyday decisions. Accenture estimates that more than 70% of customers around the globe would be willing to receive computer-generated banking advice . Offering financial guidance to this demographic is therefore more about leveraging AI to dish out data-driven insights and ideas that enable them to make informed decisions on their own —demonstrating how various small things add up to help them meet their long-term financial objectives more effectively.
This is precisely what Ally Bank seeks to achieve with the launch of their new Alexa skill. The skill comes equipped with a variety of ways to help users manage their banking needs and spending. It also has a feature called “CurrenSee” that quickly converts the price of any item a customer might want to buy into the amount of working hours it would take that customer to pay for it. “CurrenSee” will tell the bank’s Millennial customers how many hours they need to work to afford the new iPhone X or their dream vacation.
Wells Fargo too launched a new robo-adviser to empower young investors to affordably implement tailored investment portfolios aligned to their personal investment goals and needs. Dubbed Intuitive Investor, the platform is designed for customers who prefer to manage their finances themselves, and gives new and emerging investors a cheaper option to enter the markets.
SBI’s Smart Aggregator Smart Enough for Millennials?
The modern, digital customer engages with banks in a broader ecosystem comprising third party products and channels. Therefore, banking of the future needs to go beyond the financial value proposition and offer support for aggregated capabilities in the digital ecosystem–acting as the glue that helps several parts of the digital financial services ecosystem to function together.
SBI’S ‘You Need Only One’ (YONO) platform is one such initiative. The platform is envisioned as a one-stop solution that will bring banking and lifestyle under the same roof. In addition to banking, YONO will provide customers access to a host of lifestyle products and services across 14 categories consisting of booking and renting cabs, dining, entertainment, medical needs, travel and stay. SBI has already tied up with more than 60 ecommerce companies including Amazon, Uber, Ola, Myntra, Shoppers Stop, Thomas Cook, Yatra, Airbnb and Swiggy , among others to bring the latest offers and discounts to its users.
Temenos’ Digital Engagement Platform Promises Personalized Banking Anytime, Anywhere for Millennials
A siloed approach with respect to delivery channels will no longer work for Millennials. There is an urgent need to rewire the whole banking experience around their needs of seamless, end-to-end coverage. It is about making their lives easier by ensuring the ease and flexibility to bank anywhere, anytime in a tailored manner.
For such connected customer journeys to be scripted, banks need a foundational digital core that provides multiple access points and enables customers to channel-hop without friction.
Temenos’ digital engagement platform for Millennials can play an important role as a strategic enabler for an ‘outside-in’ overhaul of a bank’s channels, systems and processes in sync with Gen Y’s changing channel behavior in order to deliver superior experiences.
At the core of the future relevance and growth of banks is their ability to harness digital as a potent enabler for driving advice, aggregation and value in a proactive manner. With the incremental approach that Ally Bank and Wells Fargo have built to understand not just where Millennials are currently at in their financial lives, but also where they want to be, they can gradually solidify their role as Millennials’ trusted confidante and advice giver. SBI, on the other hand, can connect them to financial and non-financial products and services by choreographing the digital ecosystem and aggregating value. And Temenos will help banks create customer-centric journeys that go beyond conventional encounters to power a new value proposition. It’s ultimately for the banks to creatively defy conventions in order to remake service experiences and win Millenials’ trust and a lifetime of brand loyalty.