By 2015, digital banking is predicted to overtake branch banking as the preferred channel, according to the report, ‘The New Digital Tipping Point’ by PwC.
In this digitally frenzied environment, majority of the population is immersed in some device or the other, be it laptops, mobiles or tablets. It is important for banks to utilize innovative banking technology and understand the new age digital banking customer.
Digital Banking Customer – Segmentation by Generation
There are interesting characteristics of each generation from Baby Boomers (Hippies, Yuppies), Generation X (Lacthkey Kids), Generation Y (Millennial Generation), and Generation Z (Digital Natives) to the future of Generation Alpha (Google Kids).
According to the PwC research, ‘The New Digital Tipping Point’, Generation Y or the ‘Millennial Generation’ is 20% times more likely to consider using mobile or online banking than Baby Boomers. They are characteristically tech-savvy, brand loyal and consistently choose their primary bank when planning to buy new banking products.
With Generation Y being the segment that embraces technology and digital communication, banks need to focus on this group and build a primary customer relationship with them.
Give What Digital Banking Customers Want
Many banks have been following the trend of “show us your transaction history, and we will tell you who you are.” This approach of understanding customers no longer truly applies. While it is important to know customer behavior, it is more important to understand why they transact the way they do and how they wish to interact with banks.
To understand digital banking customers, you need to know what they want.
Digital banking innovation has evolved as technology companies are focusing on creating software that is more customer-centric. Currently, there are three areas of focus that banking companies need to consider when understanding the customer:
- Banking Technology – In order to ‘know your customer’, you need to provide exclusive interactions the way customers want, whether it is through mobile or online channels. New banking software programs should include customized features based on user profiles, preferences, online behavior and value added services.
- Security – Digital banking should embed robust technology that provides security and protects information and communication. Security systems should protect users’ devices and the IT infrastructure of banks as well.
- Private Banking – As the next generation of digital customers begin to dominate the market, private banks need to rework their strategies and adopt new technology. Customers extensively use new channels, devices and platforms to transact, find out about other financial products and write reviews. Banks need to keep up and engage customers through various channels and build a strong relationship through customization, personalization and customer-centric products and services.
Digital banking technology and products should be built based on a strong understanding of the digital customer behavior and preferences. In order to create a customer-centric experience, banks need to adopt new and advanced banking technology.
Find out how you can capitalize on the digital banking wave in this year’s annual conference of SIBOS, where iGTB will be showcasing its global transaction banking products, from Corporate Banking Exchange, Customer On-boarding, Payments Services Hub to Liquidity Management and more.
Read more about the Top 3 Trends in Digital Banking