Money, Mobility and Millennials – A look at what the Retail Banking industry should be doing to keep up
Samsung recently launched a pilot programme in France to test their leasing model, Up2you. The company aims to get 10-15 percent of high end smart phone users to avail Up2you in the next couple of years. This initiative has been taken despite O2 having offered a similar leasing model for the past five years and not having attracted any competitors, signifying that mobile leasing may not be a fruitful venture. So does this move indicate that is changing? Does Samsung see promise in the leasing model?
The truth is, it does not matter. What matters is that, mobility is the future and this news is another substantiation of this fact. Every industry needs to embrace enterprise mobility for establishing communication channels with employees and customers.
Let’s explore the UK’s retail banking industry in this context. Why would retail bankers invest their time and effort into offering all their services on the mobile platform, when the sector hardly qualifies as a red ocean? Nine out of ten SMEs obtain business loans from the same bank they have their account in. Almost 60% of personal customers have had relations with the same bank for more than a decade. This goes to show that retail banking customers are sticky and therefore, competitive forces in the industry are not much of a factor. In fact, at one point, the CMA was worried that this may lead to banks becoming complacent and laid back with respect to the price or quality of service offered.
So why this urgency? The answer is the millennial generation. They are the reason that even prominent, well-established retail banks need to pull up their socks and raise the quality of their services as well as the mode of offering.
One fourth of UK’s population is comprised of millennials and this audience is all digital. However, there is a twist to this when it comes to retail banking. According to the report entitled “Millennials and financial services in the UK”, published in May 2015, millennials still trust banks with high street branches. They rely on their family for information about financial products, as has been the tradition across generations. However, sites that compare product offerings are more in demand than ever. Millennials also want to be able to carry out bank transactions on their mobile devices. Sounds confusing, right?
If you, as a retail banker, want to win the millennials’ trust, you need to strike the right balance between mobile services and brick-and-mortar services.
Let us discuss the findings of this report in greater detail. The report shows that simple financial products have the highest ownership among Millennials. Also, travelling is a priority for them. When you devise new financial products for this audience, you might want to concentrate on these aspects. Three in four millennials use online resources for financial information even though family remains their primary source of information for the same. This information has great utility for retail bankers. The ideal marketing strategy then, would be one that targets the families of millennials using traditional marketing and targets the millennials at the same time using digital marketing. Educational videos to increase awareness of finance and retail banking would also go a long way for your bank.
The most important finding of this report is that, mobile apps have the greatest potential for millennials – especially the younger sections within the generation.
CXO of Kaar ‘s Enterprise Mobility Services gives her/his insights on the significance of mobility in retail banking –
“Retail Banking must bank on mobility to obtain and retain millennials as customers. There are multiple newbie retail banks that are concentrating on being entirely digital, but the truth is that millennials do not wear their trust on their sleeves. You need to build a reputation for being trustworthy. You need to have branches that work in tandem with mobile apps. Mobility can make that happen for you by virtualizing your internal and external audiences, accelerating your decisions and responses and making it easier for you to scale up. Millennials are strong headed, they respect and appreciate good service when it comes their way. You can use this to your advantage with enterprise mobility.”
So seize the golden opportunity that mobility is for your business – while it’s still knocking away at the door.