For banking companies, millennials (those born after 1984) are at the crest of the challenges they face in the new machine age. A different breed of banking customer, the millennials are an experiential omnivore who constantly seek better experiences in the way they interact with banks and access their services. Winning over this influential demographic is not easy as it was with the previous generation, the Baby Boomers. Banks have to therefore speak in the language of the millennials, and imbibe impactful approaches such as gamification to digitally engage, educates and connect, and thereby win new customers, and more importantly, retain them. Here are a few recipes for banks to win the millennial customers.
Millennial banking is a serious game indeed
The concept of gamification involves bringing together, the elements, design and principles of a game into non-game environments like banking. Gamification helps to digitally engage, educate and connect with millennial customers, and therefore, is a remarkable tool to acquire and retain customers in banking. For instance, by gamifying customer-facing tools, banks can enhance customers’ understanding of their own financial health. This also serves the purpose of allowing them to monitor progress towards their personalized savings targets.
Automation to the rescue
Millennials prefer automated robo / digital financial advice to traditional advice models. Almost two-thirds of digital natives prefer receiving advice on innovative self-service platforms. These new ways of interactions are perceived to offer greater independence and faster response. According to Telestra Research 2016, almost two thirds of digital-native millennials prefer receiving advice on such platforms. Traditional banking institutions, as well as fintech companies and neobanks are now looking at incorporating artificial intelligence and advanced analytics to offer innovative digital services. These services interact with customers, listen to their questions and offer real-time personalized advice, taking basic customer services to scale.
Personalized services for maximum reach
To battle against alternative payment providers, banks need to identify gaps in existing payment platforms and understand the importance of innovations in this space. They should leverage their rich data reserves (further enhanced by location & search data from mobile) to reach beyond payments transactions to comprehensively manage customers’ digital wallets. They can extend their value proposition with the help of contextualized, value-added services: such as location intelligence, optimized loyalty awards and special offers, digital identity management, payment advisory services, and even crypto currency integration. Banks should use their rich data reserves to go beyond payments transactions into managing entire digital wallets for their customers.
Personalization is perhaps the key to courting and retaining digital customers. The optimum trade-off between privacy and personalization changes every day, and institutions need to continuously balance these competing imperatives to remain relevant. Two of the technologies that can provide financial institutions personalized services are: location intelligence and mobile application analytics. These can be used to predict what customers are likely to buy next, and when. Banks can then strategically design and enrich user experience with contextualized, timely and value-added offers.
For a seamless customer experience
In the end, what millennials want is a customer journey that is as seamless as possible. For instance, for a customer who has recently posted about his upcoming foreign trip on social media, the bank should not only be able to help him liquidate his FD, but also offer a forex card with low transaction costs. A mortgage advisory app can be connected with social media to offer highly relevant advice to customers. Banking of the future would be seamlessly embodied within our lifestyles, increasingly consumed through mobile applications and would be deeply integrated with the Internet of Things.
Technology can never win without human connection
As banks transform their business strategies to cater to the millennial generation, they must not lose sight of the fact that while this demographic wants more automated functionality, they still expect human connection whenever they need it. The challenge therefore, lies in being able to balance the two. It is down to technology to seek this human connection to be able to digitally humanize every interaction.