Silence — an emotion, a message, a phenomenon, a movement —
Cannot by itself transform into positive interactions for the Millennial.
Technology experiences can make or break Millennial Banking. There is ample evidence that Millennials are engaging more than ever with the technology of the day. An Accenture survey says that more than 70% of customers are willing to receive computer-generated advice. Gartner also estimates that by 2020 customers will manage 85% of their banking relationship without engaging in human interaction. Couple this with the fact that 57% of Millennials would change their bank relationship for a better technology experience. What’s going to matter is the quality of user experience offered throughout the Millennial Banking journey. The question is: in the Millennial’s quietest hours, can banks cut through the eerie silence that aims to unsettle their financial well-being? What are today’s banks doing to offer compelling experiences to their Millennial customers? Let’s dive into the latest scoop on Millennial Banking.
UAE’s Oldest Launches its Newest—Neo
Mashreq Bank launched its digital avatar, Mashreq Neo to cater to the needs of the Millennial generation. Mashreq Bank’s Head of Retail Banking Group, Subroto Som explained: “Today, we see customers of all ages spending significant amount of time on their mobile smart phones, and they demand convenience. We are going branchless because our aim is to embed banking into the daily life of our busy customers, and not force customers to come to bank branches.” Neo is described as a full-service branchless bank with a suite of retail banking products, comprehensive payment capabilities, International markets trading, and personalized financial management among other features. After half a century of being in business, Mashreq is evolving its offerings in line with the changing consumer tastes.
A Finn to Chase
JP Morgan Chase has launched an all-mobile banking app called Finn that has a checking and savings account and doesn’t let users live beyond their means. It brings in the psychological angle with customer sentiment based on “want” or “need” and then assigns an “emoji” to the purchase. This also helps automate savings for users by earmarking $20 every pay period and $5 during every shopping visit. Matt Gromada, product lead on Finn, says they had studied Millennials over a 15 month period and believes that “finances are emotional”. This is akin to Moven or Simple that plans financial savings of users for their life goals based on analytics and machine learning. If only understanding Millennials was as easy as Chasing Finns!
Capital One Banks on Cafes
Capital One Cafes are popping up all over the US and the latest one is a hybrid café that’s opening in Wicker Park, Chicago. Capital One is aiming to curry favour with the Millennials with cafes that provide free WiFi, local bakes, handcrafted beverages and free financial coaching by professionals. With more than 80 million Millennials having grown up with technology in the US, Capital One is hoping to lay a new foundation for relationship-based banking.
Built on the vision that “Banking should fit your life. Not the other way around”, Capital One’s initiative to help one on their financial journey is one that not only serves to bring people together but also offer new perspectives about money and financial action plans. Wicker Park would encapsulate all this and more with ATMs, free Wifi, coffee from Peet’s Coffee and local pastries. There’s a little twist too with both banking “ambassadors” and money workshops. If people are complaining that there are too many sports bars around Wicker Park, it’s interesting to see how they are hoping to shed that image by being one of the responsible types.
Is this the technology experience that a Millennial craves for? By way of answer, in a marketing video, Capital One proclaims, “We’re not a regular bank, we’re a cool bank.”
Stashing Millennial Finances in Neobanking
Neobanking is endeavoring to break the mould of traditional banking. Microinvesting sites and apps are pursuing their Millennial customers with cross-selling techniques that aim to disintermediate bigger banks and wealth management firms. Microinvestor Stash Invest which has 1.2 million users is no exception. While it takes only $5 to open an ETF investment account, it plans to launch savings and checking services next year.
Stash Invest CEO Brandon Krieg believes that financial guidance is going to be paramount today. An Accenture survey says that customers are willing to make the switch from a traditional bank and that their top choice would be a neobank. For investment accounts, Stash charges a $1 monthly fee for investment accounts under $5000 with a 25 basis point higher for over $5000. This way Millennials can choose to make their own investments in lieu of having robo-advisors that automatically allocate assets.
It’s the Golden age of the Millennial but silence is not golden in the Millennial Banking journey. Banks need to cut through the silence that inhabits the Millennial’s life when they are arrested by a sense of financial inadequacy. According to The Financial Brand, only 24% of Millennials demonstrated basic financial knowledge. While Mashreq Bank has only now fully got into the digital space, JP Morgan Chase is making the Millennial identify emotions with finance to put them in the driver’s seat. Stash Invest is still in the nascent phase, but once the checking and savings accounts are launched next year, it would still need to differentiate its offerings to compete with incumbents like San-Fransisco-based Digit. My pick is the Capital One café that cuts through the silence with local flavors and a broader awareness around financial goals and perspectives — but more importantly a relationship-based banking approach that makes good on its Millennial promise.
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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