It’s no secret that for every day that passes, consumers are becoming increasingly connected to technology. With every new device, better network connection and fresh app, dependence on technology intensifies, ingraining itself further into our daily lives.
While digital usage is rapidly advancing across most segments of the population, one digitally savvy cohort in particular is leading the surge and consequently responsible for the proliferation of disruption across a host of industries.
Call them millennials, the social media generation, or neo-consumers – regardless of the classification the common thread found throughout this digitally driven generation is an obsession with personalization and instantaneity in all aspects of their lives. Yet, until recently, this cohort has been relatively unaddressed as a generation by financial institutions.
Conventional banks, unable to meet evolving customer needs through traditional service offerings, are beginning to adopt new technologies to digitize transactions. For example, the Royal Bank of Canada recently launched its RBC wallet to streamline contactless POS payments and add versatility to the user experience.
Yet, despite adoption of new digital products by these leading financial institutions, a new study reveals young Canadians are open to foregoing traditional brick-and-mortar banks in favor of online-only options. The study, released by Accenture, reports 40% of young respondents are looking to use an online-only bank.
This growing acceptance has already started to give rise to a new class of online options. While mobile and web components are a crucial part of the equation, the groundswell of popularity will result from their customer-centric user experience – a significant point of differentiation when compared to existing alternatives.
Specifically, to appeal to the neo-consumer segment, these online and mobile alternatives must include the following attributes:
- Zero fees: Free transactions (deposits, withdrawals, and money transfers between members)
- Simple, instant web and mobile interface: allows users real-time access to funds
- Increased user experience: integration with cutting-edge platforms like beacon technology
- Physical product: Pre-paid cards allow users to take funds offline
- Borderless: ability to easily transfer money internationally and access account while abroad
- Convenience: Ability to pay for goods or services – especially micro type purchases under $10 – via mobile devices further eliminates the need to carry cash
Additionally, as the future consumer becomes increasingly socially minded, this group will continue to opt for companies that enable social change. As we’ve seen with product-based companies like TOMS and Warby Parker, the service-based businesses that will succeed in the future will create opportunities for users to easily yet meaningfully give back to communities.
With a greater focus on convenience and access to finances, especially amongst younger generations, and ever-increasing digital demand, not only can we expect a surge in neo-banks, but the eventual decline of cash.