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Banks cannot afford to ignore Gen-Y. In a report, Catalysts for Change: The Implications of Gen-Y Consumers for Banks, Deloitte says Gen-Y could become the wealthiest generation ever. “In addition to the growing inter-family wealth transfer, their cumulative earnings are projected to increase be able to capture the insights they gain from their conversations with Gen-Y and be able to use what they learn. In addition, banks need to be flexible enough to meet the expectation of these new customers who are very different from the generations that preceded them.
In their book, Born Digital: Understanding the First Generation of Digital Natives, John Palfrey and Uri Gasse argue that there are three distinct characteristics of Gen-Y whom they characterize as “digital natives” - they are born after 1980, they all have access to networked digital technologies and they have the skills to use these technologies2. Hence, attracting and engaging with Gen-Y requires a shift in bank’s communication, marketing, operations strategy and technology infrastructure.
Over the last year and half, Efma and Oracle and have conducted a number of surveys to assess the preparedness of retail banks to serve this segment1. What we found that by and large, banks have failed to integrate critical elements that are necessary for a Gen-Y strategy.
While the social media is good for conducting a conversation it is not very good for the nuts and bolts of signing up customers, tracking them and retaining them. As a result, banks must go beyond revamping their front offices. Their strategy for Gen- Y must integrate all parts of a bank including their back office systems, business intelligence and their risk and compliance infrastructure. In other words, banks must modernize their aging technology infrastructure.
