New-gen banking: A bank built for the millennial must function as their financial wellbeing manager

By Gaurav Sharma

Millennials and Gen Z are the most significant demographic and economic force of our times. This year alone, millennials will constitute 35% of the global workforce. Within a decade, their aggregate income will surpass $4 trillion. A major bank in Australia that redesigned a credit card to appeal to millennials specifically discovered that usage volumes grew by 70% and new-accounts by 40%. Similarly, in India, the share of millennials in new lending increased by 4.6% between 2015 and 2018.

By 2030, MZ (Millennials and Gen Z) in the US will witness a five-fold increase in their wealth as they are set to inherit $68 trillion from their Baby Boomer parents—one of the most massive wealth transfers seen in modern times. Thus, banks today are facing a broader competitive threat due to a fundamental change in customer behaviour.

Most millennials and Gen Z view their current relationships with the banks as transactional, and they will not hesitate to jump ship the moment a better service provider comes along. While banks across the world are chasing returns to survive, millennials are flocking to neo-banks, non-banks, and entities like WhatsApp to transact. They are mobile natives who don’t like picking up the phone to make a call. They would instead tweet to their bank than write an email.

So, digital banking applications will have to evolve from being just a window of transactional services to providing a holistic outlook of financial wellbeing. A bank built for the millennial must adopt autonomous finance, predictive personalisation, and function as their financial wellbeing manager.

Thus, from strengthening mobile banking apps and offering chatbots to high visibility and integration with all other parts of their life, banks will have to do it all.

Besides, Gen-Z consumers are 25% more likely to share personal information and interact with chatbots to let a company deliver a truly personalised experience. Autonomous finance makes this possible.

FinTechs catering to millennials offer an excellent example of the possibilities available to a bank needed to create a genuinely millennial banking experience— from using AI to provide auto-calibrating investment portfolios to providing exceptional financial advice based on one’s income, life-stage, and aspirations.

We are all aware of what Amazon and Uber did to our lives. However, we are still banking the same way our parents did.

A redesigned bank ought to be truly customer-centric.

Author is founder of Atlantis Capital