Millennials and Gen Z are the most significant demographic and economic force of our times. By 2025, millennials will constitute 75% of the global workforce. Within the next decade, Millennials will dominate the full-time workforce. Millennials are a digitally informed group of 1.8 billion people around the world who will command larger disposable incomes than any other generation before them. The financial value of millennials to the banking system is expected to increase by almost 80% in the next five years to more than $27 billion from the current $15.7 billion in revenue in 2021 that millennials contribute. On the other hand, Millennials spend more than 29.5 hours a week on the internet. That is 50% more than the average time spent by all other previous demographics combined.
There is a rising demand for innovation in the financial services industry to address the evolving consumer needs of millennials and Gen Z through products that are intuitive and hassle-free. Over the last few years, Neobanks and digital-only banks are paving the way through their unique models. For example, a Challenger bank in Australia designed a credit card specifically to appeal to millennials and discovered that usage volumes grew by 70% and new-accounts by 40%.
How to achieve friendlier financial services for millennials
Creating a Strong Digital Presence
The bank needs to build a strong digital presence to market financial services to millennials and Gen Z. Most millennials will research the bank online before ever walking into a branch and investing, and will compare products and services of other banks. Understanding millennial banking lifestyle habits and establishing a digital presence such as a new-age website and mobile applications with the latest features allows banks to target the broadest range of people, show that they are committed to digital, and maximum customer support.
Superior User Experience
A tech-first approach to developing and designing banking products is high on the millennial wish-list. The user-friendly nature and convenience attached to other online apps are crucial to be translated to banking as well to keep the mobile-first end-user engaged.
Millennials are looking for accessibility and convenience in banking as they are used to on-demand travel, on-demand food. They want to be able to feel like they have more control, are being smarter with their spending and have the ability to maximize savings.
Increased levels of Personalization
Studies have revealed a new trait among millennials and Gen Z which the market has termed as “Wantedness”. This new trait is that millennials want to be loved by brands. Those who manage to make their millennial customers feel loved will achieve greater loyalty and profitability. Personalized services are an important step to achieving this. Also, creating a Brand persona for the bank that appeals to the millennial generation will help banks to cater to this customer segment better.
Living in today’s digital driven industry, millennials expect gratification in the form of rewards for each transaction they make on their banking app – be it saving or spending. This has largely been the appeal behind the rewards offered by Google Pay in the form of scratch cards. With time, millennials want to receive rewards beyond the basic cashback, reward points, coupons, etc. Banking apps will have to reimagine their approach of rewarding the user’s financial behavior.
End-to-end customer support
Navigating the world of finance can be overwhelming, but knowing that you can rely on your banking partner 24×7 for all queries can be the reassurance every millennial needs. It is bound to increase loyalty and customer satisfaction. With technology constantly evolving, banks are looking to different mediums such as AI-enabled chatbots, voice assistants, Whatsapp to extend customer support to its users.
However, with respect to the above points, there are many complexities, risks and gaps that banks are facing. These include:
- Complex and non-customized financial products and experiences
- Changing customer profiles
- Legacy systems
- Meeting compliance requirements
- Lack of scalable resources
Bank in a Digital Box (BiDB)
There are no one-size-fits-all solutions. But, Bank in a Digital box (BiDB), helps small banks and lending institutions embrace modernization without any disruptions. The Bank in a Digital Box solution follows a Minimum Viable Product (MVP) and add-on approach to accelerate business efficiency, meet compliance needs, and quickly acquire new customers.
The MVP approach can help launch a Neobank/Challenger Bank in 90 days at low entry and expansion costs with the ease of onboarding external products and enabling customer growth.
It also allows to avoid the roadblocks of legacy systems and the need for high technology spends with modernization.
The BiDB solution is based on three major pre-mapped tenets:
1. Base Core – As a starting point, BiDB solution clearly defines the core banking strategy based on business goals, and execution approach. The Base core has all the product and customer segment (Millennials and Gen Z) specific business functions configured.
2. Point Solutions – The point solutions function is to fill the gaps in the Base Core solution (OEM Product) and meet the target customer segment needs. Banks today need to find cost effective and flexible solutions to address new customer segments of the bank this includes the ability to onboard quickly and provide services such as digital wallets and personal finance management (PFM). Point solutions help to deliver state-of-the-art systems with a robust UI experience to address the millennial segment’s needs.
3. Marketplace Integrations – The Bank in a Digital Box solution has ready-made integrations to quickly deploy supplementary banking functions. This solution provides the means to integrate third-party products with the core banking platform. BiDB supports multiple products and services from authentication to ID scanning, eKYC for customer onboarding, Fund transfers, and more, giving banks their choice of best of breed solutions allowing for faster time to market.
How BiDB can help change your bank to support the millennial segment
Bank in a Digital Box comes in different avatars that can fit itself based on the customer segmentation, product offering & integration needs, and architectural complexities. The Key benefits of BiDB for banks include:
- Faster launch time – bootstrapped base version for quick GTM
- Minimum viable product and add-on features as per business directions
- Flexible integration options enabling personalization
- Implementation certainty – pre-configured and smooth integration
- Leverage fintech innovations
- Lower cost of entry and operations.
It is clear that millennials, along with the younger generations, will continue to benefit from both currently available digital banking solutions and those that will come in the future. As their purchasing power continues to increase, this always-online generation will go hand-in-hand with new modes of banking and their demands will continue impacting digital banking solutions throughout the globe. Banks need to keep creating and upgrading their services to meet and exceed the increasingly high service delivery expectations of the millennials and solutions like Bank in Digital Box can enable banks to reach the desired digitalization quickly and smoothly.
To know more about Aspire’s Bank in Digital Bank solution talk to an expert today.
- Key Retail Banking Trends to Watch Out For in 2022 - February 8, 2022
- Why Millennials and Lifestyle Banking go hand-in-hand - December 31, 2021
- Modernizing Core Banking Technology, Without Risking Existing Business Capability - December 29, 2021