In the event of Aspire’s millennial banking campaign launch, Gerald Reidel – the CFO of Namibia’s Ebank had a few thought provoking opinions for readers from other banks. With millennials comprising of almost 40% of today’s banking customer base, is digital the only way to increase loyalty among millennials? What really is the perfect millennial banking recipe?
Ebank’s ultimate game plan is to successfully serve the millennials, let’s find out how Gerald plans to accomplish this.
It comes as no surprise to create a banking recipe around this new clientele that thrives on Buzzfeed quizzes, Tumblr GIFs, grumpy cat memes and the random video of a hedgehog getting a tummy rub.
1. There is a lot of talk about banks getting challenged when it comes to Millennials. Is this hype or reality? Why?
Amongst their many traits, Millennials are primarily non-conformist, both in their preference of products or their use and need for services and their functionality. It is safe to say that, to a Millennial, banks traditionally played a rites of passage role in the lives of the young. Today Banks are mere service providers in a market filled with quicker, more-relevant and constantly evolving options. This reality has over time pushed Banks towards evolving from being primarily systems, pricing and product driven to becoming more Lifestyle conscious and Lifecycle relevant.
The generation in question, does not hold in their minds the memories of queuing for hours or dropping a cheque in the mail. In fact to, some the mere concept of postal services or registered mail is an alien concept.
In setting up EBank, we set out to build a business that recognises these realities and leverages technology to create omnipresent banking solutions that are Easy, Safe and Smart. Our clients could open accounts using only their cell phone and immediately access a current account, a savings product and various convenient payment services. This proved to be quite successful, especially amongst Millennials.
It must be said however that, for a new banking player to be viable and profitable in this segment, we must acknowledge the following truths about Millennials:
- The large majority of them are ‘first time earners’; They earn & command low levels of income or wealth,
- Their primary need for financial services is a need for credit; for their first car, first home or related purchases,
- Convenience and speed of service are an essential part of their client expectation but must come at very low costs and across multiple digitally powered platforms and
- They are less reliant on personal interaction with a service provider when making a procurement decision, but rather act based on the quality and rapidness of their service enablers.
As early adopters and market influencers, Millennials play a critical role in redefining the role of Banks and ultimately the movement (and circulation) of cash. This is especially true in emerging markets where the majority of the population remains unbanked and ‘unbankable’ by traditional bricks and mortar operators.
2. Are Banks doing it right when it comes to servicing today’s new Millennial clientele?
It is no secret that Millennials are often labelled as hard to please and lacking in loyalty and commitment to a single Bank of choice. That in itself, can be seen as an indication that Banks have a long way to go in replicating their golden era where a client remains loyal to a single institution for life.
At EBank, we are of the view that in order to serve Millennials appropriately, it is not sufficient to just invest in a single electronic channel. Millennials want access to user-friendly technology that makes their life easier. Solutions should be indiscriminate, highly accessible, and affordable and be of high quality. In addition, strong service levels are required to satisfy the demands of Millennials.
EBank believes that each one of these factors is important. Further, getting it wrong is not an option, as Millennials use social media platforms to immediately and publicly voice any disappointments they are experiencing.
3. What according to you is the perfect millennial banking recipe?
The perfect millennial banking recipe comprises investment in strong and user-friendly technology, easily accessible banking channels, rapid response to service requests and affordable pricing.
To get this combination right and remain profitable is no small task for any bank. Banks will however not have a choice, as Millennials are the future generation and will dictate which services they buy and which will fade away.