Financial Services Executive Lunch: Finding The Missing Millennials
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Babs Ryan presented to Financial Services industry peers across Brisbane, Melbourne and Sydney on the topic "How global leaders are engaging a generation disinterested in Financial Services" She shared some thought-provoking examples of how global and local financial service organisations are inventing new, innovative approaches to engage millennials.
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Financial Services Executive Lunch: Finding The Missing Millennials
- 1. FINDING THE MISSING MILLENNIALS Financial Services Executive Roundtable
- 3. 3 THE TRUTH ABOUT MOBILE APPS Yes, 90% of Australia mobile TIME is spent on apps, 90% but TIME is limited to ONLY 3 – 5 APPS, that are not financial. Financial app time is TRANSACTIONAL, not relational Refs: smartinsights.com; rba.gov.au
- 4. 4 YOU ARE HERE with LOTS of others Facebook 19% Messaging/Social 12% YouTube 3% Entertainment 17% Gaming 15% Utilities 8% Others 10% Productivity 2% Safari 6% Chrome 4% News 2% AUSTRALIAN’S MOBILE TIME WHEN IT COMES TO MONEY, TIME MATTERS Sources: Comscore, Pandora, Facebook, Flurry Analytics, NetMarketShare
- 5. 5 Need more Financial Education Better Tools Needed Fees, cost Like to Do it Myself Not Enough Money Fear Apathy Entitlement Superannuation Immediate Gratification Marry Later, Living With parents Trust Reasons we’ve heard why Millennials aren’t engaged with FS providers…
- 6. 6 “I don’t want to put all this work into actually managing my money,” says Cristina Cordova, 26-years-old Sources: “The Recession Generation: How Millennials Are Changing Money Management Forever,” Forbes, 30 July 2014 “Millennials and Money Worries,” Fidelity, 2014 “Now ‘me’ wants to have fun,” says Adam, 26-years-old Photo: Getty Images
- 7. 7 MILLENNIALS Time should not be spent on money “Millennials want very little – if any – part of the financial services industry.” www.benefitspro.com/ “Millennials don‘t want their lives to revolve around money.” www.pbig.ml.com “71% would rather go to the dentist than to listen to what a bank is saying.” Sorry Banks, Millennials Hate You, Fast Company 2013 “80% of people don’t do budgeting.” bankinnovation.net/ “Why so few consumers use this [PFM] tool is that so few are engaged or active in the management of their financial life.” bankinnovation.net/ “70% of customers don’t want a relationship with their financial institution, with half feeling strongly about it.” BAI
- 8. Nielson Global Survey of Investment Attitudes, Only 16% of Australians use a FINANCIAL PLANNER; 5% of Millennials* Australia has the highest SELF- DEPENDENCY 57% in a Nielsen global study of 68 countries *www.cmawebline.org
- 9. 9 “According to a new study by Eventbrite, 69 percent of millennials experience FOMO [Fear of Missing Out] when they can't attend something that their family or friends are going to. For millennials, FOMO is not just a cultural phenomenon, it's an epidemic."
- 10. 10 Where they spend their TIME Is where they spend their MONEY
- 11. 11 CASE STUDY 1 Where Millennials like to spend their time… with other PEOPLE Is that a bank, or a café?
- 12. 12 CASE STUDY 2 ENTREPRENEURSHIP CO-CREATION PRODUCT DEVELOPMENT 44.2% Half-year net profit increase 55,000 Pizza creators Continually changing, like them 50%+ Digital orders up from 30% $40,000 Highest customer earning
- 13. 13 CASE STUDY 3 Apps for what Millennials like to do: SEE/TOUCH/KNOW WHAT’S NEW, SOCIALISE, not BANK
- 14. 14 ENGAGING MISSING MILLENNIALS Stay unique, change often. What differentiates you from non-FS brand leaders? Create core products delivering their passions where they spend time; invite them to co-create Connect them face-to-face Think big, start small, move fast
- 15. 15 LET’S TALK Photo: Getty Images Babs Ryan Norman Stellino
Notes de l'éditeur
- Getty images#: 169710973 All images are from Getty unless otherwise noted.
- Almost ALL wealth management and financial services providers have been doing these to engage Millennials, with varying results. Research tells us Gen Y wants these. So why aren’t Gen Y lined up for our advice and products? DEFINE MILLENNIALS Millennial characteristics DIVERSE GROUP Grew up with digital/computers/mobile IRONIC MILLENNIALS, contradictory needs. Oliver Wyman says friends/family were most influential in the move; social media was not. Difficulty getting new accounts. MoneysEdge.com says 23% plan to change banks in the next 12 months, but…The FinancialBrand.com states that only 9 Percent of households switch checking accounts annually, and that’s usually due to a home move or mistakes. It’s DOUBLE 18% for Millennials, according to Accenture. LACK OF DIFFERENTIATION: undifferentiated from one provider to the next. How are you truly differentiated? What core products and services (rather than features) do you offer that your competitors don’t have. When Gen Y thinks of your organization, what do they say about you that they don’t say about any of your competitors. How does that compare with what they say about their favorite retailers, places to hang out, last holiday abroad, last BBQ?
- 76% do mobile banking of some sort BANKING – Australians 18+ are using banking services on their smartphones 62% (more than Americans 44%. In September 2015, nearly 8 million Australians 18+ used their smartphone for their banking needs Mobile apps like Commonwealth Bank’s Netbank and ANZ goMoney most used in Australia Commonwealth Bank is the leader in this category on both smartphone and tablet devices, followed by ANZ. Over 80% of the active reach (%) on smartphones for the top four banks – Commonwealth Bank, ANZ, NAB and Westpac – is generated by their respective applications.. However However, 85% of mobile time is spent on 3 – 5 apps, none of which is financial. Financial use is not relational: Most mobile banking is transfers, bill pay, paying retailers, checking balances, Ref: rba.gov.au
- Mobile banking vs Mobile TIME When it comes to time spent on financial apps, Social took up the largest share of time on smartphones, Overall, Nielsen and the IAB Australia reported that social media accounted for 39% of smartphone time in Australia. Facebook is the big winner when it comes to smartphone apps. It was the No. 1 app in the country in terms of unique audience, followed closely by Facebook Messenger, its own messaging app. Facebook was also the No. 2 site visited by smartphone users in Australia via mobile browser. - See more at: http://www.emarketer.com/Article/Apps-Dominate-Mobile-Internet-Time-Australia/1013355#sthash.WuUACUOm.dpufhttp://www.emarketer.com/images/chart_gifs/201001-202000/201553.gif Morgan Stanley points out that only 12 of the top 50 mobile properties have more traffic coming from apps than the browser. The discussion argues for the primacy of the mobile browser for most publishers, brands and marketers.
- This is what research tells us, but what’s behind the answers in the surveys?
- The truth is that Gen Y doesn’t want a relationship with a bank or investment company. They don’t want to move their super for better performance. They’re not motivated by a lot less fees or better returns. They are motivated by doing nothing. NOTHING. It’s not about easy, it’s not about convenient. It’s about doing NOTHING at all. Not dealing with finances. But spending time doing what Gen Y likes best. To reach Gen Y, it’s not about financial services; but rather about DOING what they enjoy -- creating memorable experiences with friends and family-- because where you spend your time is where you spend your money It’s not about advertising on their social media, but rather facilitating the socialization with others, face-to-face which is what they love best. Irony: care about future and lifestyle; but don’t want to manage money https://www.youtube.com/watch?v=YJNQacCr2Fs Fidelity video quote Photo: http://www.gettyimages.com.au/license/168576796
- “Millennials want very little – if any – part of the financial services industry.” http://www.benefitspro.com/2014/09/15/millennials-scorn-financial-services-firms “Millennials don't want their lives to revolve around money.” http://www.pbig.ml.com/pwa/pages/millennials-and-money.aspx “71% would rather go to the dentist than to listen to what a bank is saying.” Source: Sorry Banks, Millennials Hate You, Fast Company 2013 “Eighty percent of people don’t do budgeting.” http://bankinnovation.net/2012/11/banks-and-the-pfm-data-delusion/ “Why so few consumers use this [PFM] tool is that so few are engaged or active in the management of their financial life.” http://bankinnovation.net/2012/11/banks-and-the-pfm-data-delusion/ 70% of customers don’t want a relationship with their financial institution, with half feeling strongly about it. Source: BAI
- If Gen Y is not interested in spending time on their own money, does that mean they want financial advisors or you to manage it for them. No. “While 95 percent [of Gen Y] said they don’t currently have a financial planner, and 84 percent think they don’t need financial advice https://www.cmawebline.org/ontarget/why-banks-need-to-switch-on-to-gen-y-now/ The Millennial paradox – a generation of contradictions. Don’t’ trust most people but they trust machines. Service vs. advice Service people, science-based real-time tidbits of relevant advice automated. But they still would rather have nothing to do with money issues. Among other countries surveyed, Australia (57%) and New Zealand (56%) topped the list when it came to being self dependent in taking investment decisions. Neilsen study of 68 countries http://docplayer.net/17644599-Nielsen-featured-insights.html Parents #1 source of financial advice, but they’re not asking for ”advice” http://www.wealthprofessional.com.au/news/aussies-dont-trust-financial-planners-but-all-is-not-lost-142399.aspx Nielson Global Survey of Investment Attitudes, Less than one-third of Australians are happy with their financial situation, yet only 16% use a planner. But there is one demographic that is open to receiving professional advice. Just 16% of Australians currently rely on a financial planner or adviser, with the majority (57%) preferring to be solely in charge of their investment decisions. In a recent Nielson Global Survey of Investment Attitudes, the theme of trust – or lack thereof –weaved throughout the findings. When it comes to trusting the recommendations of financial advisers, the results make for a disappointing read. “There is a distinct lack of trust in personal financial planners and advisors in Australia,” said Chris Percy, managing director of Nielsen Pacific. So what about automation. PFMs, for example. Don’t’ talk about this. Notes only. Because the figures are still small. Blackrock study So why do so few Australians seek financial advice when the benefits are so clear? Personal Financial Management tools (PFMs), like Cinch (built by 3rd party Yodlee) have the right idea, but... The Yodlee tool is being used by 850+ organizations including 11 of the 20 largest U.S. Banks. Most of WM’s customers already have this tool available through their primary deposit bank or 3rd party PFMs like Mint, both of which they are far more likely to use and trust Most studies are including any financial management tool as a PFM. , “Research firm Celent reported that only 4% of online banking customers at the top 50 banks are active PFM users.” PFMs have little differentiation PFMs are quickly abandoned: “I would estimate that I have looked at the PFM app three times since it went live. Why? Because it doesn’t tell me anything.” Source: BankInnovation.net BankChoice Monitor claims 30% of consumers use a PFM, with 72% of those using a 3rd party site (e.g., Mint) It’s not a barrel of laughs (How many people asked Siri: “What is zero divided by zero?”) #1 reason: Millennials don’t want to spend time budgeting or managing finances. Most people don’t budget.
- THE HUMANITY LINK & NIKE The 'FOMO Epidemic' and Why It Matters to Millennial-Hungry Businesses Article in Entrepreneur Magazine. Summarize: “Why do millennials favor experiences over physical purchases? One part of the puzzle is that millennials see shared experiences as key to bonding: 79 percent feel that going to live events with others helps deepen their relationships and 69 percent believe that attending events makes them feel more connected to other people. Plus, the rise of social media fuels FOMO and feelings of exclusion for millennials scrolling through posts on Facebook, Twitter and Instagram about events they missed. Entrepreneurs have been cashing in on millennials' love for live experiences by inventing new venues where teens and twenty-somethings can take Instagram shots that make all their friends jealous. Three of the fastest growing categories in terms of Eventbrite ticket sales are concerts and music festivals, beer and food festivals, and color, costume and themed runs. There's still time for entrepreneurs to craft their own FOMO-inducing events, as millennials don't look like they'll be reining in on their experience-based spending any time soon. Seventy-two percent of millennials say they would like to increase their spending on experiences rather than physical things in the next year.” What does your mobile strategy offer that Gen Y is afraid of missing out on? Nike Plus case study. The Trend of HUMANITY. Digital has made us be with people more. Except financial planners. While banks use IVR, try to force self-service. 48% of Millennials want banks to have video chat. Gen Y is twice as likely to shop with others. We want to spend more time with family and the circle of core friends that Millennials grew up with – Gen Y socialize differently. They didn’t pair off to get married in their early 20s. They look for opportunities to enjoy the good life with their friends, face-to-face. How can you enable those face to face memorable events?
- Summary. So where DO Gen Y spend their time? Let’s look at some examples of how financial svc orgs are meeting Gen Y where they are…
- Case study 1 (new evolving disruptive models): Capital One 360 cafes. (describe personal experience there). US$25BN revenue. 812 branches, 8th largest in US. ING sold it’s US branches to Capital One in 2011. ING lean, branchless, cafes, non-banking employees, different local model/organization/strategy, partnership with Australia Post, and the cafe culture (Australia's "most recommended bank" also in France, Netherlands, UK, Canada and 30+ countries (where you spend your time is where you spend your money) Note: ING is different in Australia, the only country where it has more mortgages than deposit accounts. NOT SAYING THEY SHOULD ALL OPEN CAFES. That’s Capital One/ING, and wouldn’t be a differentiator. So what should you do?
- Started as a project to build a mobile ordering app. Through customer feedback on Minimal Viable Products, ended up as a co-creation strategy that made Domino’s #1 in Australia. Zero Clicks Meal customization—With Pizza Mogul, customers in Australia can now choose from 1.4 million different variations to create a pizza that they can then name, promote via their social networks, and receive ”commission” per pizza sold as a reward. One customer has earned more than $33,000. Massive PR coverage. Results: Dramatic cut in advertising budget due to customers selling the product through social media. Average basket size increase of 25%, Pizza Mogul (Agile & Lean) has been designed to allow for new features to be pushed to production on a daily basis, allowing early customer testing that helped validating the direction of the product. Created an end-to-end integrated technology platform across devices within 5 months. Discovery concluded that the fastest way to speed the ordering process was to encourage customers to order by mobile. With an aggressive goal to meet 80% online sales by 2016, and additional plans to roll out the Australian e-infrastructure to Domino’s Europe, Domino’s needed a new technology platform. They decided to partner with ThoughtWorks to create a HTML5 ordering platform for their highest revenue generating digital channels. Result: From 30% online ordering to 70% in 6 months. Pizza Mogul interacts with 13 systems and apps, which include Domino’s internal systems (e.g. pricing engine, national ingredients list, national menu, etc.) in addition to external systems and applications.
- Why a solution like BuyBye (describe mobile product): It’s about a shopping experience, not about checking your bank account (which doesn’t provide your ability to spend in context). Valuable lifestyle and purchase behavior data about where customers/prospects are (location based) and what they spend money on Engages customers with Fidelity who currently do not respond to approaches using financial products/services/advice/education/social/gamification Based upon research on how Millennials think about financial services, and what engages them Can be used to adapt/iterate/pivot on existing products/services, or build new ones Low risk rapid in-market prototyping. Customer behavior/feedback is the research
- Talk about the 4 points. Don’t follow the leader, be the leader
- Kick off Roundtable with Norman Questions (if needed) Where are the areas or competitive advantage What challenges have you found in engaging with 20 – 35 year olds that you haven’t encountered before? Gen Y is called the “fickle generation.” How do you keep changing quickly to stay ahead while knowing what will entice them? If Gen Y aren’t excited about traditional financial products, what types of products would thrill them? Since we know that family and friend recommendations are a key driver of acquisition of financial services, how have you engaged this generation to socialize about your products and services? What are you finding about the way Gen Y engages with technology? What type of tech innovation do you think they will respond to? Is having unique products any more important to this generation than others? What approaches have been successful, unsuccessful? Which brands are winning with Gen Y? Why do you think that’s true? Photo: http://www.gettyimages.com.au/license/627026833