Top 8 things millennials expect from banks in the future

Image Source: Businesstech.co.za
Image Source: Businesstech.co.za

So as promised, this is basically the second part from the post published last week around millennial Musings on banking, click here for a quick refresh on what went down last week.

This week though, the focus is on the thoughts of those millennials who consciously mused about banks of the future and what their present expectations were of the future state of banking.

As a very proud member of the financial institutions community, like any other committed individual, I really want to see traditional banks evolving and fulfilling their purpose in a way that makes their customers happy because customers are the heart of their business and a part of me also believes that this can be achieved by big corporates if given enough focus and deliberate action.

In order to ensure that everything from the feedback received is captured, the points will be themed, grouped and listed.

  • Float like a butterfly, sting like a bee. The hands can’t hit what the eyes can’t see. Basically, this famous quote by world renowned boxer Muhammad Ali sums up the primary and greatest reason why traditional banks are in danger and how they can overcome this danger. I’m not a boxing guru but I definitely this this analogy will help portray the message. Good boxers are like Fintechs, they have the finesse, speed and stamina to win the battle, but the big 4 giants have something these Fintechs don’t which is technique, experience and endurance. Now when we couple these 6 traits, that makes for a great boxer/ a great bank. So what do millennials want? The safety and stability of the old (minus the red tape and bureaucracy) but the agility and finesse of the new.
  • The future is now. This is a concept the older generations like referring to as “instant gratification”. It is a concept laden with negative connotations that relate to regret from poorly thought out decisions but this doesn’t have to be viewed that way. Let’s take the process of getting a credit card for example (even a cheque card). The reasons for why customers have to sit through hours of paperwork and credit checks only to be told in the end that their card will be hand delivered to them at the earliest of their convenience just will not fly in the future. When a customer, a millennial customer is approaching a service provider for something, they usually want end to end fulfillment there and then or else what is the actual point? Yes we could say that people must plan better for their life events so they aren’t disappointed by the wait, but what if, you as a service provider could make the future happen now for your customers by tweaking a few processes, researching the demand for credit so that branches are adequately stocked up for the demand as and when it comes? What if you were so proactive that a week before Black Friday you’re signing up customers for in-store credit cards so that they have been delivered to be used on the day? Being more proactive about knowing the customer in this case is directly attributable to sales. Customer is happy, income statements are happy, it’s a win- win you see?
  • Robotics!!!! millennials have expressed that they trust and prefer to engage and interact with technology to solve their needs than a human being. It’s much cheaper as they use data as opposed to airtime where they’re redirected to a call centre that makes them wait for 20 minutes before telling them “sorry Ma’am I don’t have the mandate to assist you with that request.” The cool thing about robotics is that it reduces headcount costs (but it does cause unemployment if not introduced and socialized correctly) on the upside thought, employees are freed up to do more meaningful and complex tasks that require actual thinking because the self service capability is actually of service, end to end.
  • Which leads me to my next point, adequately equipped/skilled online assistance… if we are to go digital, we must do so excellently. Because millennials have no desire to go to the branch, the branch must therefore be designed into a space that they want to engage in, which in this case is online. The ability to offer advice and assistance online will make all the difference from a customer service perspective.
  • However if the branch must exist, it must do so unobtrusively, in a way that allows for co- creation and advancing the economy. This way the bank achieves two things: it plays a role in fulfilling consumer aspirations and it also contributes in giving back to the community- which is very big with millennials. Purpose driven action/work.
  • Farewell NIR (Non- Interest Revenue), RIP ATMS. Millennials (and digital developments) will essentially kill this line item as business moves to and creates digital alternatives to access and transfer funds as opposed to sourcing it from a traditional ATM.
  • Staying ahead of cybercrime. With the new and fantastic era of digital banking, millennials are also cautious of cybercrime as this is one of the elements that come with the downside of digital. Their only plea with this is for banks to be proactive and engaged in the protection they offer of their assets. They want banks to be a safe and untouchable place.
  • IN-TER-GRA-TION. As mentioned in my previous post, financial institutions have a myriad of data and information on clients. More than enough to do really small but really meaningful, kickass stuff. Millennials really think it’s lame that engagements and the identification of current and future product needs are still so “banky ” and impersonal. Banks can do a whole lot more to prove they understand their clients and show up as life and business partners. Banks need to understand client lifestyles and aspirations and meet those with their data. There must be collaboration with external corporates and an ecosystem built to fulfill these needs and make it a seamless experience to attain what matters to them, irrespective of whether it’s bank-related or not.

Okay peeps so that’s the list! It was quite an eye opener for me and I learnt a few things from engaging with my amazing research sample group. I hope this perspective not only sheds some light but assists in some strategic implementations of how financial institutions cater for (not just millennials) but in actual fact, their future clientele.

If there are any other topics you’d like for me to explore and write about, please leave a comment.

I hope you’ve enjoyed the read!

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Millennial musings on banking

The long and the short of this topic is that when millennials think about things that keep them up at night, the future of banking is not at the top of their list.

We cannot disregard the strides financial institutions have made (and continue to make) in order to cater for a younger and more tech-savvy target audience however, one can question whether these changes are drastic or fast enough.

Having interviewed a group of South African millennials (between the ages of 17 and 38) on this topic, two themes emerged which I did not expect and will elaborate on below.

Category A

This category consists of individuals who worked in industries other than financial institutions.

At first, the individuals within this category could not at first contextualize the question and after giving it some thought, did not think banking would revolutionize beyond digital and did not perceive it as an integral part in their future to drive anything forward so their emotions were neither here nor there.

This finding though beckons a deeper question I think, which is, “are banks marketing the right way to millennials?” Because remember, millennials are not just a group of hippie youngsters who like skateboarding and hanging out with their friends while they listen to music and eat ice cream. Another untapped audience within this category are those young people starting Fintechs and NGO’s, or Social Entrepreneurs really making a difference within their communities and making it onto the Forbes list under 30. They have substance. They have goals and plans and at this very moment, they view banks as a bureaucratic and archaic nightmare that sometimes helps, but most times hinders productivity/ success.

I think a giant leap in the right direction would be to sort out data and understand their clients better with what they already have (which is a lot) so as to lend more intuitively when it matters.

Category B

This category consists of individuals who who worked for a financial institution and maybe they are tainted because they are positioned right in the thick of the action so they do see what’s working well and what isn’t, or maybe, I just extended a bone for them to pick.

So this group of millennials were very vocal around their expectations of what role banks should play in society now and in the future. They understood how much data banks collect and how much they should know their clients yet do not and this shows in the cosnstsnt repetition in the processes the bank takes them and their staff through, when the information can just be pooled to one central system and funneled to where it needs to go in order to fulfill the client need.

Another quick gripe linked to manual requests is digitization- which is a primary focus for a top 4 banks yet the question I have around this is “are banks digitizing because it’s the new thing that must be done or is it being done with purpose- to actually improve lives?”

I think I’ll wrap this post up here for now. All comments I received offline were incredibly insightful, and some of the insights I want to share would be expressed better in a secondary post which will focus purely on thoughts and opinions aimed at financial institutions in order to help them to implement changes that will impact the future of banking which I will publish soon!