Millennials are living a digital life. They seek partners on Tinder, cook food that looks good on Instagram, and spend on PayTM. Not for them the security of a Fixed Deposit, or the returns of a Mutual Fund. This is the age of instant gratification, and the millennials are blinded to anything beyond the most present need.
The Digital Natives may have never entered an actual bank. They are friendlier and more comfortable with a chatbot, than with a personal wealth manager in a bank. Deloitte refers to them as ‘catalysts of change’, KPMG predicts that they will be tomorrow’s accumulators of wealth and Aite has termed them the generation that banks cannot afford to ignore. So, how can the FinTechs get these tech savvy millennials into the fold of wealth creation and financial awareness?
The two species among the millennials
Millennials reside in India and in Bharat. The urban millennials are savvy, speak English, use Ola and Uber and insure their smartphones. The other species are sons of the soil, who use technology to improve their life chances, they drive Uber by using the app in vernacular. But both display the same behaviour online. They both spend hours on Facebook, and are impatient to get their needs gratified.
Millennials expect efficiency and value for time
The most popular banking products among the financial novices are the credit – debit cards and loans. According to a report by Oracle, more than one-third of the millennials feel they need financial assistance in managing their financial affair. They look to their parents for financial advice and banks can explore this opportunity using the social media and “virtual consulting”, in place of face-to-face delivery.
Jio is the starkest symptom of this digital predominance among today’s Indian youth. It crossed 100 million customers mark in less than six months after its launch in 2016.
The need for something new for the millennials
According to a report published by the Internet and Mobile Association of India (IAMAI) and the Indian Market Research Bureau International (IMRB), the usage of Social Media in rural India has grown by an impressive 100 percent during the last year with 25 million users.
Another major vertical for the youth in the space of finance is social media. A Aite survey entitled “Engaging Gen-Y: Cultivating a New Generation of Banking Customers”, found that one in five of those surveyed use social networks to solicit opinions of peers when they are researching financial products.
BFSI needs to embrace tech to make millennial’s life smoother
Banks that use social media to brand themselves have been successful in integrating social tools into their existing campaigns or creating new ones that capitalize on the spirit of the community. Citi is one of the largest financial institutions using social media to build a community around its brand. For example, Citi Credit Cards has launched a campaign that centers on the power of harnessing your Facebook network.
Kotak Mahindra Bank launched the Jifi Saver, a savings bank account which can be managed via social media platforms like Twitter and Facebook. The bank has seen rapid rise in online banking as about 40 percent of its existing bank customers are using online banking. Even Paytm and Airtel launched their payment banks.
Money management apps like Walnut and offline payment apps like s2pay are making life easier for the youth who live life online. BFSI don’t have a choice, since the millennials make up a large number and the generation coming after them are even more tech savvy. So, it is better to address the millennials quick before a BFSI brand becomes another Kodak, who was killed by smartphones and Instagram.
These innovations in product design and financial services are a move to attract the youth into the banking fold. Today’s banking must heed to the proverbial case where the mountain goes to Mohammad, as the latter is too engrossed on its smartphone screen.
Come to Fintegrate to know more about methods to involve the potential 500 million young customers for financial inclusion. Book your seats here.