Long-term behavioural patterns and emerging trends are demonstrating that Gen Y professionals have specific expectations for their banks, which is waking up financial services to a new area of service which can be capitalised on, according to KPMG.
In KPMG’s Banking on the Future Report 2017, the audit giant found professional millennials wanted more product diversity, stronger engagement with technology, advice and ability to pursue entrepreneurial vocations, and less emphasis on ‘big life events’ like property ownership.
Gen Y professionals, defined as those aged between 18 and 30 who were university educated, well paid, technology-savvy and global minded, made up 22 per cent of the Australian population.
KPMG partner and head of financial services management consulting, Daniel Knoll, said the expansion in the size of the Gen Y sector was significant enough to classify it as an area that required attention.
“Given the growing size of the Gen Y segment, its economic importance cannot be underestimated,” he said.
“They are the ‘mass affluents’ of the future – and interestingly, their individual customer experience with their bank is currently their biggest pain point.”
Knoll said the increased focus from Gen Y on entrepreneurial pursuits and the support they received would be a key differentiator between leading and lagging banks.
“Getting the right innovative (digitised) services and offers in place to support this entrepreneurial focus will be an important differentiator for industry players,” he said.
Over a quarter (28 per cent) of professional millennials now held financial products with three or more financial institutions, which showed lack of trust was high and shopping around common.
“There is no single route to capturing and retaining Gen Y professionals,” Knoll said.
“All financial institutions must step up their level of delivery to attract them because failing to act will further widen the opportunity for competitors and fintechs to take the prize.
“Now is the time to realise that when it comes to banking, the Gen Y cohort is sophisticated and demanding. Innovative digital solutions is not a ‘nice to have’ – for them it’s a given.”
