Nenad Crnčec
As the largest generation in history, Millennials will surpass Baby Boomers in 2019. Currently, more than 71 million Millennials in America represent a buying power close to $1.3 trillion annually.
To appeal to this generation, many in the financial services industry are ditching traditional money management to focus on simple banking strategies. In order to compete with a flux of new startups finding success with this generation, Sankar Krishnan, executive vice president, Banking and Capital Markets at Capgemini, offers unique insights on how more experienced and larger banks can better connect with these consumers.
Jeff Fromm: How do Millennials and Gen Y differ in their reception, trust and loyalty toward traditional banks?
Krishnan: It’s common knowledge Millennials and Gen Y live their lives on smartphones, and it’s easy to see why. Daily comforts, such as Uber, Starbucks, Amazon, Tinder and Netflix, are just a swipe away. As a result, these demographics have become accustomed to a quality digital customer experience where ease of use and inbuilt functionality are front and center. For them, convenience equals loyalty.
Banks are responding to the demands of Millennials and Gen Y by promoting products and services through mobile apps. The growth in digital marketing and customized targeting of individuals using behavioral analytics is key to getting the right product to the right consumer. Millennials are unlikely to use a banking app that does not have feature functionality built in similar to those they recognize in more tech-led companies like Amazon or Uber.
Fromm: What characteristics are prompting this difference?
Krishnan: Put simply, there are two factors driving a shift in generating loyalty. First, Millennials have grown up with the Internet, so as consumers they are more digitally savvy than previous generations and demand a quality digital experience. Second, there’s an unprecedented amount of choice out there. No longer do we have to pay in one of two or three ways, or pick a banking provider from one of a few high-street providers. There are a huge number of apps and technologies offering everything from streamlined payment options to wealth management.
