Banks, the ‘millennials code’ has been cracked
By Benjamin Cher July 25, 2016
- What they want from their financial services: Trust, relationships and technology
- Banks not out of the race yet but must seek partnerships to remain up to speed
SO what exactly do so-called millennials, those aged 18-34, want? Addressing that question has been an ongoing headache for a horde of industries, from travel to fashion … and of course, banking.
If you were to settle for a glib summation of a very complex and complicated issue, it would be: Trust, relationships and technology from their financial services providers.
At least according to Rocky Scopelliti, global industry executive of the Banking, Finance & Insurance business at Australia’s Telstra, who also authored the study Millennials, Mobiles And Money: The Forces Reinventing Financial Services.
“The millennial generation is seeking more value from their relationships with their financial services providers,” he says.
“For most millennials, transactional competence and operational efficiency are a given. In addition, they have been conditioned to expect and demand personalisation, customisation and convenience.
“This generation, more than any other, expects service experiences and technology that cater to their lifestyles,” he says, speaking to Digital News Asia (DNA) via email.
That is quite understandable, but what is also surprising is that “millennials believe value-relationships can be fully established and maintained over mobile, particularly as their affluence increases,” he adds.
According to Telstra, Scopelliti has more than 20 years’ senior management experience in the information technology and financial services sectors.
He has produced 11 thought leadership research reports that have become widely recognised for their contribution to the development of digital financial services.
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Banks still part of the equation
Despite the rise of financial technology (fintech) disruptors, the end is not nigh for traditional banks.
“Banks are not being seen as redundant – they are perhaps being disrupted by fintech and adjacent players who deliver creative, innovative applications, but they still have an edge: They are the most trusted [by millennials],” says Scopelliti (pic).
‘When asked which platforms or types of organisations they trust with personal information, 76% of millennials nominated banks – no other type of provider came close.
“This suggests that the historical reputation of banks for physically protecting cash and other assets has translated to a digital equivalent,” he adds.
Millennials also demand information security and privacy, something which emerging fintech companies do not have a good reputation for.
“Banks are seen as a safe haven for personal information. In a world of constant threats to privacy, such a reputation is a huge asset,” says Scopelliti.
But this trust is not enough: Millennials are still generally dissatisfied with their financial service providers, and trust can only go so far.
“The massive amount of ‘trust capital’ is a major competitive advantage for traditional financial institutions – however, trust is perishable,” says Scopelliti.
“Despite the importance of security and privacy offered by traditional financial providers, less than half of millennials are satisfied with the performance of their main financial services provider, pointing to a need for better alternatives,” he adds.
One way that banks have been trying to reach out to millennials is through their mobile devices, but their strategies have to be more comprehensive, since many of the fintech startups disrupting their business are already mobile-led.
“Given that many of these disruptive, mobile-led players have existed for five years or less, traditional banks must start offering mobile-first financial services while upholding their reputation of being trustworthy and secure,” says Scopelliti.
“Millennials value relationships grounded in security, privacy, flexibility, and that are real-time, multi-channel, emotionally-connected, personalised, predictive and automated, and they are open to whoever can provide it,” he adds.
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