In our last chat with Jeremy De Mello, Account Executive and Millennial here at Zafin, he talked about the opportunity banks have with the Millennial demographic. There’s a profit potential and deep customer relationships to be had — if a proper strategy is in place.
In this part of his series on Millennials and banking, Jeremy dives into what challenges banks are facing that make implementing this strategy difficult — but far from impossible — for most large banks.
Jeremy: The biggest barriers that banks face when it comes meeting millennial banking needs? There’s two. They’re both internal actually, but in different sectors. Culture is the first large hurdle. If you’re running a digital campaign, that doesn’t just mean digital on the outside it means digital on the inside too. It’s not sustainable to have a digital focused, digital targeted offer to millennials that requires manual validations internally. It’s not scalable.
The FinTech startups that you are competing against for millennial banking dollars — they have processes and technologies in place where it doesn’t matter if it’s one-to-one or one to one hundred thousand, their processes are scalable and just as efficient whichever way you want to slice.
Peter Drucker said culture eats strategy for breakfast. If you’re strategy is truly digital transformation but your culture isn’t? Your strategy is going to fail and you are going to lose.
Obviously culture change will be incredibly important for banks, but is there any technology obstacles they face?
The other big challenge that banks face is technological. Banks have the data necessary to do personalization well, but they don’t have the capability to do it right. They don’t have the capability to execute on it.
We’ve dealt with clients with 100 billion, 200 billion, 300 billion dollars in assets and before the came to us, they were built off of software from the 60’s patched with software from the 70’s patched with software from the 80’s. You cannot execute a digital strategy with software from before digital was a thing.
You need the technology to backup your ambitions.
Once these issues have been dealt with do you think Millennials will take notice? Is it simply a matter of “build it and they will come?”
It’s a bit trickier than that. Another big barrier that banks face is getting over the internal hurdle of their brand not conveying as much trust and legitimacy as they think it should. If your banks has been around for over 100 years, that should matter.
But to Millennials the 100 year old bank and the one year old FinTech startup are just about the same in terms of trustworthiness until someone gives them a reason to think otherwise. You can’t just depend on your brand and you can’t just depend on your branch coverage. What you can depend on in the face of tech companies trying to capture deposits, is that banking is your core competency. This is what you do day in and day out. Find a better way to cater to your customers. Find a better way to cater to your millennial customers and you are on the inside track to winning the war for deposits.
Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.
Cam is the Digital Communications and Marketing Coordinator at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share the Zafin role as leader in the industry. Follow him on Twitter @CamSmoth