How to Build Online Banking for Generation Y

By Shelby Hutcherson  |  Posted 2009-01-06

How to Build Online Banking for Generation Y

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. 

Go Mobile, Where the Users Are

Step No. 4: Go mobile, where the users are

Creating an optimal user experience also means going where users are. For Millennials, that means the cell phone or smartphone-the device they interact with more than probably any other. Mobile is an emerging channel, currently used for balance refreshes and transfers.

In the near future, banks will need to provide secure mobile banking solutions that address consumers' wide-ranging needs and preferences through multiple modes (including text and browser as well as downloaded applications). For financial institutions, it's essential to aggressively move into the mobile channel where the next generation of users will be, as today's wireless devices evolve into tomorrow's wireless wallets.

Step No. 5: Personalize, personalize, personalize

Generation Y doesn't view personalization as intrusive-they expect it. Younger consumers don't just expect their bank to serve up personalized content based on their online behavior and account transactions, they expect to have some measure of control over preferences such as frequency and timing of alerts, as well as how their financial information is organized and presented on the online banking site.

For example, financial institutions could offer overdraft protection in sufficient time to help targeted consumers avoid a negative balance. Event-triggered campaign management tools could suggest on-the-spot loyalty rewards to consumers as incentives tied to certain online behaviors (such as paying bills or using bank-issued credit cards). Additionally, financial institutions could supply interactive calculators and widgets that serve as virtual financial mentors to help consumers save, invest and guide them through major financial decisions.

The future is personalized

Generation Y, like most consumers who bank online, want their online banks to do more than recognize and serve their basic needs. Increasingly, these consumers expect their banks to engage, educate and relate to them as individuals, not just as generic customers.

For financial institutions, realizing the promise of next-generation online banking will require gaining a greater understanding of their customers. Applying that deep insight to deliver online financial services that anticipate and satisfy customers' personalized needs is what will allow those institutions to thrive.

Shelby Hutcherson is vice president of the Innovative Solutions Group at Synovus Financial Corp., a $34 billion financial services holding company headquartered in Columbus, Ga. Synovus provides commercial and retail banking, as well as investment services, to customers through 32 banks, 440 ATMs and offices in Georgia, Alabama, South Carolina, Florida and Tennessee. Shelby can be reached at

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