Banking: The way Millennials dream of it
Having engaged with hundreds of experienced bankers over the past couple of years and after understanding the challenges which the banking industry faces at present, most of us agree that a paradigm shift in the way banks approach and engage the end customer is the need of the hour. While ‘Personalisation of Services’ and having a ‘Single View of Customer’ remain a few buzzwords, being on the charts of every bank’s tech strategy, the implementation of the same has been a bit lacklustre, partially because of the regulatory framework inhibiting the speed at which the banks operate and partly because of no clear use cases on how to proceed.
In an effort to simplify the same, we created a few product demos, ran some PoCs and interviewed some veterans in the industry basis 5 questions (in no particular order) to help us outline a plausible way ahead for personalisation of banking services as follows:
1. Who: Focus on the Millennial customer
Not only does Gen-Y (people born between 1980–00) constitute more than 47% of the working class population at present, they seem to be the torchbearers in the mobile-first revolution and forecasted to be the highest-earning generation in the next 10 years. The differences in the way millennials go about their business are quite stark if compared to their predecessors.
While the earlier generation was that of ‘savers’, this one is of ‘spenders’. Customer service calls irritate us, car/home loans scare us, visiting a bank branch tops our lists of not-to-dos, a 0.2% difference in interest on deposits doesn’t excite us, but convenience does. This is a generation which values entertainment and experiences over cars and homes. But as literate and aware the millennials might be, this is a generation confused with choices and lower attention spans, so it is imperative for the banks to be precise, opportune, fun and transparent about their offerings while reaching out to the Gen-Y.
2. How: Analyse the customer’s Needs, Wants and Desires before you reach out
While a bank may have a wide range of financial products and services ranging from de-mat accounts, to forex cards to offer to a customer, knowing which product a customer might be interested in and when is critical in order to peak the customer interest.
For example, let’s consider a customer planning a holiday abroad. For such a customer, having an internationally accepted credit/debit card becomes a need, getting a discount on his flight/hotel booking through that card - a want and a reduced forex rate while exchanging money - a desire. If pitched at the right time to the right customer, a bank can substantially increase its cross-sell and up-sell opportunities while ensuring a perfectly delighted and satisfied customer.
Connaizen’s Next Best Action analytics suite helps the banks achieve this and a lot more for millions of its customers. You can read more about it here.
3. What: Don’t Spam! But, Surprise the customer
An average Indian banking customer receives around 20+ promotional SMS and e-mail communications from his bank on a monthly basis which mostly go un-noticed and as a result the Click Through Rates (CTRs) for these communications have been as low as 1%.
In order to improve this and make these communications smarter and more relate-able for the end customer, we ran a PoC with one of India’s leading private banks with the objective being to pre-empt a customer’s next card transaction and serve him a promotional offer accordingly. The results of the same not only surprised the customer but the bank and us alike.
A detailed case study of the approach and results of Connaizen’s NBO analytics are available here.
4. Where: Be effortless, anytime and everywhere the customer is
It’s been a while (22 years to be precise) since ICICI Bank championed the launch of internet banking services in India but unfortunately, the adoption of internet banking and app banking still has a long way to go as far as the Indian market is concerned.
The challenge here is two-fold. First, enabling the customer to access all the banking use cases at the click of a button which most of the larger private banks have already been working on and have made major strides in and second, enhancing the customer engagement on these apps. A key area of concern in this regard is the app update lifecycle which the banks have. Less than 5% of Indian banks having an update lifecycle < 3 months and just a 22% of them having this lifecycle of 6–12 month, the rest of them just launched the app and forgot about it, maybe.
Though there have been some refreshing updates earlier this week with IndusInd Bank foraying into using WhatsApp for transaction alerts and Kotak Mahindra launching Keya, surely more banks need to follow suit and decrease the dependence on customers visiting a branch or attending IVR calls.
While analysing the engagement stats across various communications channels of a bank, we came across a very interesting use case i.e. depending on the financial product in question, a customer’s interest varies as per the communication channel on which he/she was pitched the product. Connaizen’s Omni-Channel Marketing Solution (OCMS) helps the bank personalise the right time and medium of communication to ensure optimum customer engagement across all channels.
5. Conclusion: Respect the customer’s individuality
All in all, the key to winning over the millennial customer for banks is to NOT treat them as clusters based on demographics and geography as they’ve always done before, but as individuals, each having a taste of his own. For this is a generation trying hard to re-invent the existing wheel or to break it. Crypto-currencies or blockchain as a replacement to internet is good indicator of it. This is a generation tired of the herd mentality of the previous ones. This is a generation trying to stand out with each person wanting his own perfect fit and unlike someone else’s. The solution is simple: Personalise the offerings and experiences for everyone and make banking fun.