A report from KPMG has put the spotlight on what Gen Ys want from their banking experience, and what banks can to do help.
KPMG’s Banking on the Future Report 2017 revealed a number of insights concerning Australian ‘millennial’ professionals and their banking habits and desires, along with their attitudes towards banking with so-called ‘tech giants’ like Uber.
What millennials want when it comes to banking
KPMG highlighted a number of findings from their report for their significance:
- Millennial professionals are “demanding” an improved and enhanced banking experience to better suit their digital lifestyles, along with increased product diversity.
- Millennial professionals are becoming less and less keen on the idea of institution loyalty – 28% held products with three or more different financial institutions, compared to 11% in 2015.
- 84% would entertain the idea of banking with a “tech giant” such as Uber.
- Convenience is king in the eyes of millennial professionals, but a majority (76%) still want to be able to have face-to-face conversations when it comes to important things like mortgages.
- Many millennial professionals are delaying traditional life events such as property ownership.
- Half of those surveyed were currently planning an entrepreneurial pursuit of some sort.
— Simon Kuestenmacher (@simongerman600) March 19, 2017
What the findings mean for financial institutions
KPMG has painted the report as a “wake up call” for the financial services industry, saying that as a significant percentage of the population, millennials cannot be ignored.
KPMG Partner and Head of Financial Services Management Consulting, Daniel Knoll, says the economic importance of the growing Gen Y segment “cannot be underestimated”.
“They are the ‘mass affluents’ of the future – and interestingly, their individual customer experience with their bank is currently their biggest pain point,” Knoll said.
In the KPMG report, Gen Y or millennial professionals are identified as being:
- Those between the ages of 18 and 30 years
- University-educated, relatively well-paid, tech savvy, and more globally minded
- A major demand influencer, who will heavily influence how banks deliver products and services
- Will form 50% of the workplace in just 5 years
- Already makes up 22% of Australia’s population
Mr Knoll says banks must deliver an enhanced customer experience if they want to satisfy their younger customers.
“This underscores the demand for convenience we’re seeing from Gen Y.
“They demand diversity and aren’t necessarily going to be loyal to one financial services brand or product.”
(Daniel Knoll, KPMG Partner and Head of Financial Services Management Consulting)
The Gen Y Ten Commandments
KPMG wrapped up their report by laying out what they’ve concluded are Gen Y’s top 10 desires when it comes to banking, which they’ve dubbed “The Gen Y Ten Commandments of Banking”:
- I want my day-to-day transactions to be seamless and effortless.
- I’ll only go to a branch for something big or to resolve a problem.
- I would change banks if it was easier.
- I want to be rewarded for being a loyal customer.
- I want services that are tailored to my needs.
- I want access to assets without the hassle of ownership.
- I want my bank to support my entrepreneurial ambitions.
- I want to manage my money better.
- I want to believe that I have the best deal.
- I would bank with the tech giants if they provide better products.
The report also warns against inaction on the part of financial institutions, saying that “failing to act will further widen the opportunity for competitors and fintechs to take the prize”.
“Now is the time to realise that when it comes to banking, the Gen Y cohort is sophisticated and demanding,” the report said.
“Innovative digital solutions is not a ‘nice to have’ – for them it’s a given.”