To engage the millennial generation, Claro Partners Co-Founder Aldo de Jong said at Innotribe at Sibos that banks need to rethink their business model and develop new approaches to reach younger customers. Compared to the traditional model of a more predicable life path and segmentation based on income or life stage, for example, banks need to offer meaningful experiences and enable customers to use digital to keep their options open.
Speaking from the perspective of a millennial, Wharton FinTech Co-founder Daniel McCauley said that whereas their parents used to trust brands and rely on one-to-one relationships, millennials don’t want to talk to banks or be tied into going to a bank. Instead, millennials will trust in technology, their social networks and friends to get opinions on which services to use. They also prefer to deal with as well as to work for businesses with a social mission and values that resonate.
Successful financial services
This new mindset of millennials means that success factors in financial services are changing, de Jong observed.
Millennials prefer an “easy in, easy out” relationship so that they do not get trapped, so it is important for banks to benchmark themselves against other digital services and make sure it’s easy to get out. They also prefer simplicity and a sense of control as well as engaging with companies that are genuine and true to their purpose.
As they build relationships with millennials, then, de Jong said banks need to make at least four shifts. First, they need to move from authoritative relationships that assume consumers will trust the organization because it’s a bank to shared relationships that focus on working together. Next, they should shift from simple loyalty to relevant engagement. Then, they need to move from planning to preparation for what the customer will want. Finally, they need to shift from delegation to enablement for financial management.
Following a discussion during the session, a participant said they also learned that banks can benefit by finding a way for millennials to be fiscally responsible through community responsibility and that it may be important to push information about financial services to millennials rather than having them pull it out of the bank.
For participants, many of whom were well beyond the age of the millennials, the session offered valuable insights that could start them on the way towards a radically new approach to reach younger customers far more effectively.
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