Personalized Consumer Banking -- Innovating for Millennials With 'Cool' Factor
NEW YORK ( MainStreet) The Millennial generation's need for products and services to be tailored to their tastes and preferences has made a huge impact on Internet and e-commerce businesses. Personalization has been the flavor of the month for many months now and it is the new normal.
Banks have been at the forefront of using technology for their core banking processes and customer acquisition, but only now are they adding user experience to their "To-Do" list. Fascinating examples are emerging about how banks are innovating to address and even surpass customer expectations.
The Customer Speaks
However it would be useful first to listen to what exactly the customer is saying. First Data, a leading financial technology solutions provider, conducted a survey of almost 4,000 people with bank accounts and credit cards across markets ranging from the U.K. and the U.S., to the emerging markets of China, Brazil, and India.
First Data's VP of Product for Mobile Solutions Chris Cox shared some interesting insights.
Banking apps were used by 52% of respondents, and 58% expected the banks to take their individual circumstances into consideration, he said. It gets more interesting: 71% of those surveyed said they expected real-time access and support from their financial services provider. Welcome to the impatient world of the Millennial customer.
First Data's observations are echoed by technology major Cisco, pointing to the symbiotic relationship between finance and technology.
Their 2012 Omnichannel Banking Study shows that 45% of customers favor a virtual banking alternative over a physical branch where they may not get the personal attention they feel they require. While there may be considerable gaps in income and standard of living between the developed and emerging markets there is hardly any difference in their behavior78% of developed market customers preferred to use the Internet for banking needs, closely matched by the 72% in emerging markets.
What explains this homogeneity between the developed and emerging world, something not seen in other sectors like automotive or transportation? The answer may lie in the ubiquitous smartphone.
"Mobile evolution has opened up a new platform for the financial sector," Cox says. "Banks that provide their customers with the option of mobile banking or downloading a mobile wallet give them with the tools to bank and shop how and where they want."
In fact, the First Data sample had a higher percentage of Chinese respondents with a Smartphone (92%) than Germans (55%). Marry that with the fact that 80% of Millennials own a smartphone, and a pretty clear picture starts to emerge.
So how do banks take advantage of the opportunity offered by smartphones and deliver a rich, rewarding experience that not only engages the customer but fosters long-term loyalty?