Millennials and the personalised approach
There’s no escaping the fact that Millennials are now the largest generation in existence. They’ve recently overtaken Baby Boomers in numbers and soon they’ll be reaching their wealth ownership potential. This makes them the most significant up and coming client base for financial service institutions.
Millennials are the also the zenith of the instant gratification generation. They want to manage business in the same way that they manage their personal life, ideally while going about their day. The ease with which this generation has adapted to constantly available technology at their fingertips translates to their expectations when it comes to wealth management and investment.
For a generation that uses Apps and online services for everything from buying houses, cars and holidays to managing personal finance, it’s the obvious next step. And as this is a generation that is now coming into its prime earning years, there’s a lot of business to be won by financial institutions.
The key to engaging millennials and retaining their custom as clients comes with a personalised approach.
When FinTech becomes ‘Funtech’
Understanding the expectations of millennials and wealth management is vital. Traditional banking models and financial institutions need to adapt — and fast — or risk being left behind. It’s more important than ever to cultivate the right kind of relationship with the client base and to be willing to be flexible when it comes to advice and product services.
Companies and advisors need to understand just how connected this generation is, in all aspects of their lives. From dating to banking, making GP appointments to monitoring their health, there are barely any aspects not entrenched in technology.
Apps that use the concept of ‘gamification’ are common and have been exceptionally successful in engaging an audience. So, does the answer lie in ‘funtech’ for financial institutions?
Gamification of data
Although investors and fund managers may not immediately think of securing their finances as ‘fun’, forward thinking start-ups are subtly using the same gamification techniques that fitness, shopping and lifestyle Apps do.
Accessing bank accounts and financial information has been quickly accepted, and not just by millennials. But they’re the generation who are using things like Square Cash, Venmo and Stripe. And the reason behind the popularity of these services lies in the slickly packaged user engagement experience. Making the services functional, easy to access, fast, simple and visually pleasing delivers a packaged experience that millennials are used to, respond to and expect.
Users are more likely to engage with Apps that deliver this kind of experience, regardless of the history and experience of the financial institution powering it. An accessible and adaptable User Interface (UI), along with deceptively simple usability will go a long way to engaging new clients. And if the service is flexible enough, keeping them.
Technology is constantly evolving
While technology is evolving all the time, with innovations such as virtual reality (VR) and chat bots becoming ubiquitous, it’s also about recognising that people too are changing. Millennials face life challenges in a completely different way to generations that have gone before and with a completely different world outlook.
Time and quality of life are becoming more important, and speed, efficiency and accessibility are the watchwords. Apps and services need to empower users so that they can be more productive, remain in control of their choices and manage their finances in the way that they want to.
Are traditional service providers up to the task?
Meeting the expectations of this generation isn’t easy. The constant need to innovate, develop and engage is changing the way financial institutions do business. Traditional powerhouses of financial advice have been sometimes left behind as FinTech start-ups beat them to the punch with new apps and services.
The time for major financial institutions to look forward and invest in FinTech is now. The industry is at the crunch point as we move into managing the wealth of the millennial generation and can’t afford to be left behind.
Research and development
As with all major changes in any industry, R&D is crucial. Analysing data that’s available to them about millennials, their habits and engagement with services and products is key. Without physical face to face contact, it’s not enough to get an investor to your website — the next step is to engage them enough to follow through with doing business.
Understanding the online habits of this generation can help financial institutions, providers and advisors to make better product development decisions. Partnering with FinTech services and providers who can work with them is an increasingly popular way for the traditional companies to move into this sector.
Working with new technology
While the millennial generation isn’t yet the most valuable in terms of wealth ownership, it won’t be long until they are. The changes within the industry are seismic and they’re not going to go away. The only way to keep up with the new breed of investors and fund managers is to adapt, innovate and understand.
Millennial investors want to do business their way, and expect services to come to them. Engaging with the right personalised touch will be invaluable when it comes to gaining and keeping clients in this brave new world of FinTech.