Growing up in a world immersed in digital technologies, Generation Y holds the highest of expectations about how they think their online banking experience should be. Knowledge Center contributor Shelby Hutcherson explains how regional and community banks can develop online financial services that attract and retain members of Generation Y, their toughest new customers yet.
Born at the dawn of the digital age in the early 1980s, the oldest among
Generation Y have never known a world without personal computers and video
games. The youngest of these so-called Millennials are still in their early
teens, using their cell phones for texting more than talking, counting their
"friends" on MySpace and going head-to-head against Ninjas on their
Xbox.
The Millennials may not have the most money or be the most profitable to
banks-not yet anyway. But one day, Generation Y-the largest American generation
since the Baby Boomers-will outnumber their parents' Boomer generation. They'll
control the lion's share of financial assets in this country as well. In the
meantime, financial institutions need to keep a close eye on this consumer
group anyway. After all, they represent the future-and they're the ones for
whom we're building the next generation of online banking
now.
No doubt about it, this tech-savvy generation won't be easy to please. So banks
should develop innovative online financial services to attract and retain their
toughest new customers.
To do so, the following are five key steps
they should take.
Step No. 1: Make user experience a priority
Generation Y won't settle for their parents' online banking experience,
delivered in a bland interface that barely gets the job done and isn't fun to
use. To go toe-to-toe with larger banks with multimillion-dollar investments in
the online channel, smaller regional and community banks will need to deliver a
comparable Web experience or they may risk losing some of their Millennial
customers (as well as other consumer segments). This means banks need
to offer Web pages that load quickly, transactions that post almost in real
time, fewer clicks to navigate the site and online banking applications that
incorporate the latest functionality to help all consumers better manage their
finances.
Step No. 2: Understand consumer behavior
Banks should make an early commitment to delivering an optimized user
experience. They can partner with solution providers that invest heavily in
research and development to help understand consumer behavior through surveys,
usability studies and advanced analytics. These findings provide valuable
product design direction and can be used to shape the approaches banks take to
fully understand their customer segments.
Step No. 3: Integrated online experience
Sometimes it's the simplest improvements that yield the greatest results.
Banks can implement a simple functional user enhancement that gives consumers
direct access to online bill payment features from within the online banking
user interface.
For example, the next generation of online banking seamlessly integrates all
commonly viewed account information: bill pay, balances, transfers and personal
money management. It's all integrated onto a single screen for enhanced
usability and a better consumer experience. Rich Internet applications
(RIAs) such as Asynchronous JavaScript
and XML (AJAX) and Microsoft
Silverlight transform yesterday's flat, one-dimensional interface into a
dynamic, multidimensional online banking and bill payment user
experience.
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