Building Online Banking for Gen Y

Marketing to generation Y or X is continuing to gain imporantance, financial services not being an exception. During the past three months, 69 per cent of generation X/Yers have shopped online and 65 per cent used online banking—more than any other group. And not surprisingly, this generation identifies the online / mobile offering of a bank to be one of the most important factors in selecting a new bank. Todd Lesher, division president of Fiserv Electronic Banking Services and Shelby Hutcherson, vice president of the innovative solutions group at Synovus Financial recently collaborated to provide insight how to build a online banking experience for this generation.

Not Your Father's Bank: Building Online Banking for Gen Y

Growing up in a world immersed in digital technologies, members of Generation Y have the highest of expectations on how they want to interact with their banks online. Born at the dawn of the digital age in the early 1980s, the oldest among Generation Y have never known a world without personal computers and video games. The youngest of these so-called Millennials are still in their early teens, using their cell phones for texting more than talking and counting their "friends" on MySpace.

Millennials may not have the most money or be the most profitable to banks -- not yet, anyway. One day Generation Y, the largest U.S. generation since the Baby Boomers, will outnumber their parents' Boomer generation and control the lion's share of financial assets in this country. In the meantime, financial institutions need to keep a close eye on this consumer group because they represent the future -- and they're the ones for whom we're building the next generation of online banking today.

Still, a common thread among all of Generation Y is technology, especially when it supports a lifestyle need and is embedded into everything they do. No doubt about it, this tech-savvy generation won't be easy to please. In this next generation of online banking, banks will develop innovative online financial services that deliver a rich, innovative experience to attract and retain profitable customers. For example, Synovus Financial, a US$34 billion financial services holding company, headquartered in Columbus, Ga., delivers online and mobile financial services keeping a key principle in mind: Build it not only for today's customers but also for tomorrow's.

User Experience: The Priority Gen Yers won't settle for their father's online banking experience delivered in a bland interface that barely gets the job done and isn't fun to use. To go toe-to-toe with the emerging social networks being created, banks of all sizes with investments in the online channel must deliver a comparable Web 2.0 experience or they risk losing some of their Millennial customers and other consumer segments. Banks must provide an online banking experience in which pages load quickly, transactions post nearly in real-time, and fewer clicks are required to navigate the site. Online banking applications must deliver all relevant financial information at a glance on a single screen for easy access: electronic bills and payments, account balances, transfers and personal money management tools. All these enhancements will help all consumers better manage their finances while providing a rich user experience.

Understand Consumer Behavior: Banks should make an early commitment to delivering a unique and intuitive online banking experience that encourages service adoption and avid use. This effort begins with partnering with solution providers that invest heavily in research and development to help understand consumer behavior through surveys, usability studies and advanced analytics. These findings provide valuable product design direction and can help banks fully understand and market to their customer segments. Given the turmoil in the financial markets, customers are looking for banks to provide them with greater control in managing their accounts and tracking their expenses and cash flow.

Integrated Online Experience: Sometimes it's the simplest improvements that yield the greatest results. For example, Synovus implemented a simple functional user enhancement that gave consumers direct access to online bill payment features from within the online banking user interface. Consumer enrollments in online bill pay in the first month jumped a surprising 50 percent. They also saw an average 9 percent lift in payment volumes during the 90-day program. The next generation of online banking seamlessly integrates all commonly viewed account information -- bill pay, balances, transfers and personal money management -- onto a single screen, for enhanced usability and a better consumer experience. Rich Internet platforms such as Ajax and Silverlight transform yesterday's flat, one-dimensional interface into a dynamic, multi-dimensional online banking and bill payment experience.

Go Where the Users Are: Mobile Creating an optimal user experience also means going where users are. For Millennials, that means the cell phone or smartphone, the device they interact with more than any other.When Synovus was among the first to pilot mobile banking in Georgia at Athens First Bank and Trust Company in 2007, 42 percent of those using the service were members of Generation Y. That's not surprising, given that AFB&T serves Athens, Ga., home of the University of Georgia and a large population of Millennials who stay glued to their iPhones and other smart devices. The mobile pilot demonstrated a strong commitment to meeting consumers on their terms and a forward-looking approach to adoption of new technology. Since the pilot, they have rolled out the downloaded mobile banking application to Synovus' 34 banks and their customers, and the adoption rate has far exceeded expectations.

Mobile is an emerging channel, currently used mainly for balance refreshes and transfers. In the near future, banks will need to provide secure mobile banking solutions that address consumers' wide-ranging needs and preferences through multiple modes, including text and browser, and downloaded applications. For financial institutions, it's essential to aggressively move into the mobile channel where the next generation of users will be, because today's wireless devices are evolving into tomorrow's wireless wallets.

Personalize, Personalize, Personalize: Younger consumers don't just expect their bank to serve up personalized content based on their online behavior and account transactions. They expect some measure of control over preferences such as frequency and timing of alerts, as well as how their financial information is organized and presented on the online banking site.

Event-triggered campaign management tools suggest on-the-spot loyalty rewards to consumers as incentives tied to certain online behaviors like paying bills or using bank-issued credit cards. Additionally, you can supply interactive calculators and widgets that serve as virtual financial mentors to help consumers save and invest and guide them through major financial decisions.

Members of Generation Y, like most consumers who bank online, want their online bank to do more than recognize and serve their basic needs. Increasingly, consumers expect their bank to engage, educate and relate to them as individuals, not just as generic customers. For financial institutions, realizing the promise of next-generation online banking requires gaining a greater understanding of their customers. Then they must apply that deep insight to delivering online financial services that anticipate and satisfy customers' personalized needs. Organizations that do all of these things well stand the best chance of surviving and even thriving through today's challenging economic times.

Originally published in CRM Buyer 2/20/2009

Is Turmoil is Boosting E-Banking Usage?

Fiserv Inc. recently conducted a survey and found that economic turbulence is driving more consumers to bank online.

Seventy-one percent of respondents said they were watching their finances more closely than a year ago. Of those, 75% said they use online banking; 28% said they were using it more often than a year before; 44% said they were using it the same; and 3% said they were using it less. Use of other channels, such as automated teller machines, call centers, and branches, declined and use of mobile banking was essentially unchanged.

Sixty-three percent of survey respondents said banking online gives them a greater sense of control over their finances.

The October survey of 1,009 online U.S. adults was conducted by Forrester Research Inc. of Cambridge, Mass.

Todd Lesher, the president of the electronic banking services unit at Fiserv, of Brookfield, Wis., said in a press release Thursday, "This survey indicates that online banking is still a great opportunity for financial institutions looking to strengthen their ties with consumers." From American Banker article.