Banking on Generation Y
In
an attempt to woo young generation, banks are increasingly revamping
their strategies. Financial Insights, an IDC company, today (Mar. 2)
released a report that sheds light on banks initiatives to chase Gen Y
generally people born between 1977 and 2000 market in the
Asia/Pacific region.
The
report says banks' Gen Y strategies will evolve in three phases. In the
first phase, banks will modify current channel, product, as well as
customer experience strategies. In the second phase, they will start to
develop specific strategies that target segments and sub-segments within
the Gen Y customer base.
In the
third phase, banks will focus on innovation in a bid to resonate with
this group of customers, which will result in new products and channel
formats being introduced into the market.
"The
strategies of Asia/Pacific banks to attract the Gen Y demographics are
currently disparate and tentative. Banks still have to clearly
understand the habits, mindset and preferences of this group of
customers," remarks Michael Araneta, senior research manager at
Financial Insights Asia/Pacific. "However, some characteristics of Gen Y
banking customers such as their preference for interactivity, openness
to credit, demand for choices, pride in communities, and their sense of
entitlement, have become more apparent. The overarching trait of this
group is the pervasiveness of technology in their lifestyles."
Highlights include:
The rise of the Gen Y segment signifies that the banks'
current multichannel strategies have to be recast. For most Asia/Pacific
banks, greater focus will be placed on online banking and mobile
banking. In fact, the prevalent use of mobile devices is already
shattering the notion that a bank's channel is owned, managed and
controlled by the bank itself. The emergence of the Gen Y segment, which
is the first generation to have used mobile phones since they were
young, will bring a bank channel well into the ownership and control of
the customer.
The current range of products targeted at Gen Y customers is
limited. This boils down to the nascent demand for financial services by
this group of customers. However, financial institutions across the
region have seen several successes with Gen Y customers in broad product
categories such as deposits, cards, and money and wealth management.
Increasingly, go-to-market strategies of banks will focus on
new media such as online videos, blogs, podcasts, gaming and social
networks. For example, initiatives to integrate debit- and credit- card
rewards to social networks have been successfully launched. Banks are
also investigating the feasibility of "advocate strategies", and are
looking to engage influential Gen Y individuals who are willing and able
to recommend its organization to their network of friends.
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