They are savvy, numerous and rich. For private banks, millennials represent a new focus for current and future profits. Usually defined as those born between 1980 and the early 2000s, millennials will soon enter their peak earning years. This will result in a substantial rise in global wealth, combined with financial assets earned in more prosperous times by their baby boomer parents. In 2015, two-thirds of this population was Asian and until 2020, the total net worth of global millennials is estimated to range from US$19 to 24 trillion (Deloitte). However, millennials do not trust global financial institutions like their elders did, mainly because of the financial crisis and the volatility of the markets. So, how can private banks capture this wealthy emerging generation?
First and foremost, digital banking is essential. According to a FICO study, digital channels are the preferred way of conducting banking activities for millennials. This can include checking account balances, monitoring any potential fraudulent activity, transferring funds and performing account maintenance.
Moreover, millennials are used to receiving information anywhere and anytime thanks to the smartphone revolution. Banks need to adapt and create an effective digital experience to ensure that the right information is immediately available over millennials’ preferred communication channels, or they’ll run the risk of losing this important client segment. Over 50 percent of millennials would change their bank relationship for a better technology platform solution, warns a Deloitte study.
Millennials also expect a high degree of personalisation from their bank. To meet this challenge, the key is to reach the client on their preferred channels and engage with them for their banking needs. Indeed, 43% of millennials state that they currently do not receive banking communication via their preferred channel.
Leveraging everyday social media channels such as Twitter, SnapChat and WeChat could prove to be extremely effective for capturing the attention of millennials, yet banks have still to overcome the inherent security and compliance challenges of leveraging these consumer grade applications.
Some banks are trying to replicate the functionalities of these chat channels within their own branded banking apps. This being said, achieving a high level of adoption and engagement is always going to be difficult because the banks are in effect forcing consumers to use a separate application just for security’s sake. Banks could reach clients more effectively by targeting them via the platforms which are monopolizing their customer’s screen time.
Millennials demand a more modern and savvy way of communicating with their financial services providers, which remains a relevant business challenge for private banks. Meeting their digital expectations while ensuring necessary levels of security and compliance can be the silver bullet for financial services firms that want to win over this profitable client segment.
APrivacy’s innovative technology solves this problem through its data-centric approach to security. By embedding the security in the information itself, banks can now more easily implement a multi-channel communication strategy by confidently sending personal or sensitive customer information over any channel in the knowledge that it can only be read by the intended recipient while meeting regulatory and compliance guidelines.
Digital Security Perfected – APrivacy Ltd. is an award-winning company which combines military-grade data security with a seamless user experience on any platform, any device, anywhere. APrivacy Ltd.’s enabling technology now allows the financial services industry to confidently communicate with clients using their favourite channels leading to increased revenues and reduced costs while meeting the strictest regulatory requirements.
