In the early 2000s, paying college tuition required going to the bank to deposit cash. Now, much later, banking has changed dramatically, and the future of money is in our hands.
Modern consumers can easily transfer money from their bank accounts to mobile wallets using basic or premium phones, while the wealthy transact through their wearable devices. As technology continues to evolve and customer needs become more specialized, the future of money and finance promises to be even more transformative.
Likewise, it’s hard to imagine a time before television became ubiquitous. Today, many people consume content on smartphones and tablets, but for decades, televisions have been the primary source of news and entertainment, and this generation probably remembers the idea of “getting home in time to get the news.”
This rapid adoption of modern content consumption trends parallels the current shift in money and finance, where forces create an urgent need to act.
The new generation of smart consumers is shaping the landscape. Their evolving consumption preferences and habits are driving industries to innovate.
Powered by technology, the next generation of consumers presents banks with a wealth of opportunities to revolutionize service delivery and drive sector growth.
The next generation consumer is not defined by age, but by need.
According to the EY Consumer Banking Survey 2021, rising consumer expectations and increased competition are driving the need for transformation. These consumers, who are characterized by the prevalence of smartphones and internet access, interact with brands through social media and apps. This presents a clear opportunity for banks to meet their needs with technology-based financial solutions.
But despite their adeptness with technology, modern consumers still value human interaction in empathetic transactions. This dual preference highlights the growing need for a seamless blend of “buildings and clicks,” the idea that physical branch banking will continue to be complemented by digital finance.
Evolving consumer expectations have elevated digital banking from a convenience to an essential service. At the forefront of their priorities are next-generation consumers who enjoy banking on the go and have a deep desire for human connections, increasing the need for banks to become more human as they transition to digital.
In response, the banking sector is rapidly evolving with personalized digital banking services while branding them accordingly, while at the same time coming hand in hand with healthy human interactions with consumers.
Mobile banking not only provides an unparalleled opportunity for banks to enhance customer engagement, but also deliver personalized banking experiences.
To truly unlock this potential, banks need to expand their apps to include comprehensive wellness and lifestyle content. This could include features like financial health monitoring, personalized financial advice, and even access to wellness resources.
Moreover, leveraging the Internet of Things (IoT) can enable seamless interactions, making banking an integral part of everyday life. By integrating these elements, banks can create a comprehensive digital ecosystem that not only meets the financial needs of customers but also enriches their overall lifestyle.
Additionally, next-generation consumers value a sense of belonging to a community or tribe. They want to connect with financial services in the places they prefer, creating a greater need for embedded finance.
To embrace this new era, banks need to consider that for the next generation consumer, banking is not just about managing money; it is also about integrating finance into their daily lifestyle to the point where “finance” becomes a natural part of their larger lifestyle, with finance playing a supporting role and “by the way” for the consumer, telling bigger stories.
The writer is the Director of Consumer Banking at Absa Bank Kenya.