01 Jun Financial institutions need to get creative to attract and retain younger customers

They may have a penchant for eating smashed avocado on toast, but it is becoming increasingly evident that Generation Y, also referred to as Millennials, cannot be ignored by businesses.

This generational demographic cohort is quickly becoming one of the most important market segments in Australia. According to KPMG, Gen Y already make up 22 percent of the Australian population but predict that number that will jump to 50 percent in just five years.

Defined by their tech-savvy ways, a by-product of the digitally connected world they have become accustomed to, the informed Gen Y are constantly inundated with choice and they expect products and services to be designed around their needs. This beg the question of how do you attract and retain this growing market who will become the country’s biggest earners in just a few years? Here are three ways banks can cater to Gen Y.

1. Make their values your values: ‘The customer always comes first’ is a mantra that has long served leading retailers. In a digital world, where customers can change their banking arrangements with a few simple clicks, this focus is now a matter of survival. Any successful bank of the future will have no choice but to take note of the rising expectations of a younger audience and place their needs at the centre of everything they do.

2. Be a technical leader: Gen Y are not only familiar with smart phones, laptops and other hi-tech gadgets, they see them as an integral part of their lives. They respect people and organisations who share this attitude and they want to be associated with brands that are leaders in this space. Offering innovative new banking tools can become an important part of your appeal and will set you apart from your competitors. The importance of this is illustrated by research cited by Visa, which found that 24 percent of millennials switched their primary chequing account to have access to better mobile capabilities.

3. Offer more ways to bank: Online banking is undoubtedly the preferred way that younger customers take care of their finances. This makes it vital your digital channels offer a comprehensive range of services. Interestingly though, according to The Financial Brand3, Millennials consistently state that they also see value in branches, where they can have higher level financial conversations with someone they can trust. The key here is choice, and the more options the better.

References:

[1] https://assets.kpmg.com/content/dam/kpmg/au/pdf/2017/scaling-fintech-opportunity-sydney-australia.pdf 

[2] https://thefinancialbrand.com/64893/millennial-banking-strategy/



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