With an estimated population of 1.7 billion, millennials, or Generation Y, as they are popularly known as, account for over 20% of the current world population of 7 billion. The term ‘millennial’ refers to anyone born between 1980 and early 2000s. Unlike previous generations that gradually adopted technology, millennials were born when the digital revolution was already transforming the world at a rapid pace and had permeated nearly every aspect of human life. Born amid this, millennials are considered the natives of the digital age.
Millennials are characterized by their affinity for technology and are often at the forefront of driving technological disruption. In addition to being tech savvy, millennials hold more educational degrees and possess relatively higher income levels than any of the previous generations. This gives them a higher purchasing power – a power they are well aware of and exercise liberally. The average millennial researches extensively before making any purchasing decision. They also have higher expectations of all product or services and expect them to be consistently updated to meet their growing demands.
Implications for financial services providers
The millennial behavior has had a major implication on the evolution of financial services. On the technology front, the average millennial uses a minimum of three devices on which they access personal information, perform transactions, or purchase financial products. The devices range from smartphones and laptops to personal computers and tablets. Millennials expect a seamless experience across devices – anywhere, anytime. With a plethora of financial products and services available for them to choose from, millennials are quick to move on from a product or service if it does not grab their attention. When they do move to the consideration phase of the buying process, millennials thoroughly research a product before making a purchase. Every aspect of the product – features, price, benefits, drawbacks, ease-of-use, and most importantly, customer service – is evaluated prior to a purchase.
The implications of this, for a financial service provider, is far reaching. They must leverage technology to its full potential to not only cater to the demands of the millennials but also to stay one step ahead and foresee the services that a millennial will soon need. The task might seem challenging, however, technologies such as the cloud and big data can help build services that can provide valuable insights respectively.
Customer service in the millennial era
Of all the product features a millennial considers before making a purchase, customer support is one of the biggest factors that influences their purchasing decision. Unlike previous generations that sought human interaction as their primary mode of customer support, millennials choose technology as a first step for customer support. Human interaction is considered as the last resort for customer support. Financial service providers must be cognizant of this while designing their customer support strategies. The expectation of a millennial is that even customer support must be equally omnichannel as the product or service they are purchasing – and all of this must happen in real time.
Consumers can now raise query tickets on their mobile phone app and track their status through their dashboard on a personal computer. A growing number of financial services providers are already adopting social media channels such as Twitter and Facebook to interact and resolve queries of their retail customers. Organizations are also leveraging online communities to engage with their customer and provide support.
The way forward
Technology must be a key factor in the design process when it comes to orchestrating a consumer experience that will meet millennial’s expectations. This has pushed financial service providers to continuously innovate the ways in which they engage with this generation – a group that is estimated to comprise nearly half of the population by 2020. Innovation in the financial services sector may be slower than in other industries owing to high risk compliance and regulations such as data privacy laws and security. However, the millennial consumer is spoilt for choices – and innovation is a must – failure to do so will lead to drowning of a brand’s voice in a highly competitive market.