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Retaining the next-gen digital customer in banking

Although the digital transformation journey in traditional banking has improved efficiency and employee productivity, it’s a mere steppingstone to attracting the next generation of customers, namely, Gen Y and Z. Banks need to revisit their strategy and ramp up processes and technology to intrigue these digital natives who expect service at the press of a button.

Fintech and neo banks are giving incumbent banks a run for their money when it comes to payments and personalisation, and daily operating cash flows. Younger consumers are increasingly preferring neo banks for their primary financial relationships, for both deposits and payments. As neo banks extend their offerings to investment banking and insurance, traditional banks stand to lose out to them. Banks need to look at how to interest and retain Gen Z customers, the “zoomers”.


What banks need to do

Traditional banking is moving away from legacy technology to hybrid cloud and on-premises models. It is, however, just the tip of the iceberg. Incumbent banks need to look at a variety of ways to grab the attention of millennials and Gen Z. Let’s take a look at how banks can do this.

Provide a unified offering across products and services: A customer who grew up with a mobile phone in hand is likely to expect every transaction to be seamlessly integrated. Re-looking at traditional business models may become necessary to enable this. For instance, banks can leverage and collaborate with super-app platforms to integrate service offerings and provide a holistic platform for financial services.

Build on trust and loyalty: Banks provide the distinctive advantage of data protection and privacy. Incumbent banks are bound by banking regulations, and consumers know that banks must protect their financial transactions. A young consumer is informed, connected, and can quickly form opinions; hence, it is essential that all transactions remain transparent and ethical. Banks need to integrate with service providers, who value data security as much as they do, to ensure that they still stay on top of this expectation.

Gen Z is also very loyal to brands. They trust the brands they grew up with and tend to buy from preferred brands for a long time. Banks can use this to their advantage to develop long-term relationships.

Provide personalised and intuitive service offerings: Banks need to customise communication and transactions to gain trust and interest. While this is appealing for all consumers, Gen Y and Z are particularly a segment for whom customisation can be a game-changer. Personalised loyalty programs, cash backs and financial guidance all work towards attracting Gen Y and Z, who value uniqueness and authenticity. Leveraging AI-based chatbots and personalization are key ways to easily serve the needs of a digitally savvy customer.

Maintain presence across channels: Mobility and technology are the way of life for Gen Z. Hence, the default expectation for banking is the same. Like other services, banking should provide omnichannel communication, marketing, and support, with built-in flexibility and switching across channels.

Be customer-centric: Ultimately, banks need to align to consumer needs. Millennials and Gen Z use technology as a convenience and not as a privilege. Enabling banking for this mobile and tech-savvy generation requires a revisit of the ecosystem, strategy, and culture. Banks require an understanding of consumer behaviour and need to provide the right tools and resources based on individual needs. For instance, virtual assistants providing instant support for mundane tasks such as bill payments may gain you a loyal fan-base.


Bag the zoomers

A rapidly changing environment and the next-gen digital customer require banks to be proactive, predictive, and continuously add value to their offerings. Personalised and mobile services integrating applications with legacy systems, convenient and easily accessible apps, and a fantastic customer experience will result in long-term gains.  All of these require a holistic approach, one that is driven by transformation. Being part of a connected ecosystem and providing a robust, responsive, adaptable, and scalable platform is important. This transformation helps banks become agile and hyper-productive.*

The next-gen digital customer is both discerning and informed. He/she is looking for seamless financial services from trusted providers. Incumbent banks have an indisputable edge in terms of trustworthiness, reliability, and accountability. They just need to capitalise on these and seize the opportunity to build long-term relationships by providing a personalised, interactive and immersive platform for an entire gamut of financial services.

*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.