Millennial Disruption breaks the ingrained mould,
Moulding mobile forces for digital banking ambassadors.
It’s no surprise that banking is at the highest risk of disruption. The Millennial Banking revolution is going to take the global banking industry by storm. Rather than a business-to-consumer approach banks need to start thinking about a consumer-to-business approach. Only when they put customer outcomes at the centre of this value chain will they truly be embracing this revolution. According to the Millennial Disruption Index, 73% would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal or Square than from their own nationwide bank. Let’s take a look at some of the more recent disruptions in the millennial banking space:
Now This Is News!
NowThis News has partnered with JP Morgan Chase to roll out a new content channel for millennials with a focus on personal finance. This new digital media would help millennials navigate their personal finances. A Deloitte study cited that 84% of millennials wanted active social engagement before making important financial decisions. This is exactly what Chase Bank wanted to tap into– a budding user interest in financial information. What better way to partner than with a company that’s built a vibrant social distribution network with 11.6 million Facebook followers and multiple sub brands like NowThis politics!
Brian Becker who heads chase’s newsroom says that the plan is to churn out upto 150 videos a month that can be distributed to both NowThis and Chase’s social channels. NowThis is quite a millennial Chase!
Spicing it Up with the Millennial Banking Recipe
Leading technology services firm, Aspire Systems launched the Millennial Banking recipe for banks to revolutionize their engagement with millennials. With 53% of Millennials feeling their banks don’t offer them anything unique according to the Millennial Disruption Index, it is paramount for today’s banks to partner with financial service providers and develop intuitive digital banking solutions that woo their millennial audience. The campaign is actively into four exclusive types of engagements:
- The Millennial Bankers’ Community– A platform where CXOs can ideate on millennial engagement strategies and successfully implement them with constructive feedback.
- Flix– A monthly thought provoking video series to augment digital service offerings for banks to win over their millennial audience.
- Scoop– A monthly newsletter covering banking initiatives in improving their Millennial experience journeys.
- Outlook–A comprehensive research paper throwing light on various hyped technologies and whether they really help banks to engage and grow their millennial customer base.
Acorns- The Nuts and Bolts to break the Mould
Millennials aren’t so great with finances, juggling their time and attention among diverse activities, jobs, relationships, investments and distractions that catch their eye. A PwC study says 34% of millennials are unsatisfied with their financial standing while 18% are ‘not at all’ satisfied. A George Washington University study corroborated this stat with only 8% millennials polled having a high level of knowledge about personal finance. Financial products offered by banks are not proving to be appealing enough for the tech-savvy millennial! Neobanks are looking to gain a foothold with mobile-friendly financial services where traditional banks are failing.
Acorns—one such neobank is a mobile app that has more than 2 million investment accounts and connects with your bank card to create ‘virtual spare change’. For instance, say your coffee costs $3.5, Acorns rounds off the purchase to $4 and adds this virtual spare change of $0.5 to an investment account entered into an ETF- a diversified portfolio of stock to track the performance of a certain index like S&P’s 500. It aims to connect spending with responsible saving.
Millennial Business Owners become Digital Banking Ambassadors
Despite financial hurdles, millennials are optimistic about their careers and want to take greater control over their future with a strong entrepreneurial spirit. According to America’s Small Business Development Center, 49% of millennials want to start their own business in the next three years while 54% would quit their job and start a business in the next six months with the ‘right resources’ that seems like an elusive entity. A Wells Fargo study also confirmed that 42% of millennials believed that banks were unlikely to give them a loan or a line of credit for their business because of their age.
As millennials depend on personal credit, to a great extent, to grow their business, this is a great opportunity for banks to cash in on this opportunity as the same survey pointed out that 76% of millennials are willing to pay more for financial products and services. Offering a seamless and customized lending application online can significantly improve convenience, speed and decision-making for millennials while also reducing operational costs for the bank.
Millennial disruption is going to be the new normal. With the current millennial generation pursuing their passions in a frenzy, they are more preoccupied and broke than any other generation! It’s for the banks to creatively disrupt to engage millennials with top-notch initiatives that will simplify their financial lives.
JP Morgan Chase is creating a vibrant social distribution channel and this would only bear fruit with an active engagement from their relationship managers and moderators. FinTech service providers like Aspire Systems are covering a wide range of millennial banking initiatives that banks can use to boost their engagements. We have also seen how neobanks have implicit and responsible savings schemes without having millennials to overthink their savings plan. Apart from Acorns, apps like Digit, Pocket Guard, Mint or Moven are all designed to help millennials manage their finances with personalized and user-friendly dashboards. Making millennials digital banking ambassadors is the goal all banks must strive to achieve as you’ve not only facilitated their aspirations but also enabled them to invest in their own dreams.
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- Silence is Not Golden in the Millennial Banking World - November 3, 2017
- Millennialization of Everything in Banking: Exclusive Interview with Jeremy Balkin - October 13, 2017