I just attended the ABA Marketing Conference in New Orleans and they had me at the first lunch where they had a gospel choir and served gumbo. I didn’t know how much better it would get from there but I did learn a ton. After three days of attending talks by some of the best Finance Industry influencers, content creators and bankers I was able to create three buckets of meaningful change. I heard over and over again from speakers talking to the bankers “Don’t let yourself get too far behind”. Here are all three areas of change that are being driven by the new generation of wealthy millennials.
Artificial Intelligence:
The digital assistant era is upon us. Dave DeFazio from Strategy Corps had an Alexa on stage and demonstrated how quickly banks and digital assistants had come. Capital One and American express now work with Alexa and the tasks that she can complete is amazing. I’m not sure the “Computer” on Star Trek was even this fast at finding out how much you spend on Starbucks last month. Alexa could even isolate a month and calculate how much you spent in the past, make transactions, and view offers. She can add money to Starbucks cards or Amazon cards too. Think how “AI” will work in the future?
Bank of America is launching “Erica” a bot that goes one step further to calculate complex solutions – all hands free. Launched from the app Erica can analyze spending to offer solutions to save you money or pay back your debt faster. You will literally have a banker that can give advice in your pocket. The technology is in its infancy but think how great it will be to sit on the subway and do some financial planning on your way home. Erica? What should I do with my bonus? Invest or pay back debt let’s do the calculations. So cool, right?
HENRYs (High Earnings Not Rich Yet):
Now that millennials are coming into their own regional banks are going to have to work hard to attract them. The oldest are turning 40 in a few years and they want homes, financial planning, business loans and more. Right now 80% of millennials pick the top 3 big banks and as regional bank clients become older, they need to do more to attract them. The industry calls them HENRYs.
Millennials are use to the convenience and easy of use of companies like venom, uber and amazon. Regionals need to integrate these UX queues into their customer facing digital services. Visa has a new car app that you can just drive up to a parking spot, gas station, or lunch spot and the car charges the card and you drive off. How cool would that be as part of your digital app to attract new millennials. Take the friction away and satisfy a need of our customers. Palm readers in branches can take the pen on a string away from a teller. It would look cool, help with security and new product sign up.
Content needs to be adapted to tell a story in 30 seconds or less. What values do your bank have that is reflected by your content and advertising. What gateway product or service can you offer millennials to get them in the door. Cool apps, student debt management, or better credit cards.
FinTech Consolidation:
There are 6000 banks in the US and still too many. With the onslaught of FinTech companies how can this fierce competition allow for any growth? The non-innovators will be gobbled up or lose any hope for growth. Zelle is available for most regionals and supported by the big banks but has low usage. It provides similar venmo features and was built to be integrated into regional and community banks apps with low pick up, so far.
Many of the most successful FinTech companies are all backed by big banks. Acorns is backed by Pay Pal, Penny is also PayPal and Digit is backed by Chase. When a FinTech gets too big or popular you simply need to peel back the label to see that there is a bricks and mortar behind them. FinTech might end up being a consolidation with banks adopting tech like zelle and investing in the “disruptors” so they don’t lose accounts to the innovators. Venmo is also launching a debit card soon. What is old is new again. Why re-create the wheel when FinTech and banks can merge and get better together. The hoards have come through the gates and their name is HENRY!
It will be interesting to see how wealthy millennials change the industry even more. I bet it’ll be more of the same for Artificial Intelligence, HENRYs being a top target market and FinTech launches and consolidation.