Banks have a unique opportunity. Millennials are becoming an ever more important market segment and there’s a deposit gold rush just waiting to happen. But as many industries have discovered, appealing to the dynamic taste of this generation isn’t always easy.
I chatted with Jeremy De Mello, an Account Executive at Zafin, about how banks can capitalize on this opportunity and drive true, sustainable deposit growth through digital transformation. Here’s part 1 of our discussion:
Cam: You’ve written before about how Millenials represent both an opportunity and a challenge for banks. What do you mean by this?
Jeremy: Millennials, simply put, represent a 200 billion dollar deposit growth opportunity for banks. But Millennial loyalty when it comes to banking is very fickle. And why shouldn’t it be? Millennials come from the perspective of if I’m not receiving good customer service from one place, why would I continue to give them my business?
So this presents a unique opportunity and a unique challenge for banks because it’s no longer enough to be the best bank. They’re not comparing your bank to other banks. They’re comparing your bank to Amazon, to the hottest financial technology company with the best app that they use every single day, or every week. They’re comparing you to whatever the best customer experience they’ve had is.
So Millenials have different expectations to generations passed. What are some of these?
The needs of Millennials are different relative to other generations in a couple ways. The first way is they place a very high value on personalization when it comes to their banking experience. They don’t want generic offers. They want you to invest in offers that cater to them and their lifestyle. Maybe they want cash back. Maybe they want purchase discounts. Maybe they want a special degree of customer service. It’s up to you to use your data, your bank’s data, to find out what they want, and bring it to them.
The other way in which Millennials differ from other banking sub-segments is that they want extremely good customer service. It’s not enough to say “Oh, we have physical bank branches.” Millennials don’t define customer service as having wide coverage of physical locations. Millennials define customer service as how many taps, how many clicks, how long do I have to wait for this thing to load that I can do what I need to do, that I can pay the bill that I need to pay, and then move on and get back to my life.
If banks know this, and can anticipate these needs, what are the actual hurdles to meeting them?
It’s not enough for banks to have promotions that are digital on the outside, but manual on the inside. It’s not going to work if your bank is offering a 300 dollar bonus to create an account, but internally you’re still validating and doing the checks and balances on that using spreadsheets and manual processes.
If an actual person has to check if somebody’s met offer redemption criteria, that offer won’t work. The push internally to create digital campaigns and better offers, and more personalized offers, that won’t work. That won’t fly. Digital transformation is not just window dressing. Digital transformation means yes, transforming your external offerings, your apps, your online interfaces, all of it. But it also means transforming your internal company culture to find efficiencies and find better ways of doing things. That’s what digital transformation means.
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