Do you Know your Next Generation Banking Customers Well Enough?

In case you missed it, one of the more amusing “annual lists” was released again last week.  Beloit College, the oldest continuously operated college in Wisconsin (founded in 1847), made public its annual Mindset List ( which, for more than a decade, has been taking a look at the cultural references for incoming college freshmen.  The list was created to help Beloit College faculty be mindful of their dated references and relate to new students.  In their words it has become “…a catalog of the rapidly changing world view of each new generation.”

This year’s list comes with the following introduction:  “As for the class of 2015, without any memory whatever of George Herbert Walker Bush as president, they came into existence as Bill Clinton came into the presidency.  Their parents, frequently older than one might expect because women have always been able to get pregnant almost regardless of age, have hovered over them with extra care and have agreed with those states that mandated the wearing of bike helmets.  Ferris Bueller could be their overly cautious dad, and Jimmy Carter is an elderly smiling public man who appears occasionally on television doing good works. ‘Dial-up,’ Woolworths and the Sears ‘Big Book’ are as antique to them as ‘talking machines’ might have been to their grandparents…”

While the list of 75 observations is varied (e.g. McDonalds coffee has always been just a little too hot to handle), a few are pretty poignant:

  • There has always been an Internet ramp onto the information highway.
  • They’ve often broken up with their significant others via texting, Facebook, or MySpace.
  • They won’t go near a retailer that lacks a web site.

The fact that technology is so important to this generation should actually come as little or no surprise.  Whether banks will be successful in engaging them remains to be seen, though.

The traditional method for selling to customers at the bank branch certainly isn’t going away. However, more and more customers will not visit their local branch to buy products and services.  They expect banks to make it easy to research and buy without ever needing to set foot in the branch…unless they want to.  This is particularly true for younger generations – Tower Group analyst firm reports that 30 percent of 18 to 34 year-olds prefer to purchase financial products and services online.

There is money to be made by expanding purchase opportunities through multiple channels.  A Tower Group survey found that offers made at branches yield a 41 percent uptake rate, while on the phone, uptake is only 19 percent.  Online offers beat them both with a substantial uptake rate of 51 percent!  Unfortunately, far too many banks are struggling to take advantage of this opportunity.  As the survey revealed, banks made online offers only 30 percent of the time compared to the number of offers made at the branch.

While banks can profit by making offers over multiple channels, there are inherent risks.  If customers are bombarded relentlessly with the same offer, or offers that compete across different channels, sales fatigue can result. Customers might feel the “bank doesn’t know me,” thus causing uptake rates to drop dramatically. 

A central decision hub helps avoid this.  It allows the offer strategy for each customer to be managed holistically, making sure an offer is appropriate to the individual, the interaction and the channel.  It also ensures that any offer does not “step on the toes” of others already made, or planned.

In the old days, when there was a Berlin Wall, and “savings books” were popular, you could rely on the local bank’s teller to know at least a little about you.  Today, the online experience should be no different.