Youth, like women, is fast emerging as a key focus area for the banks. I have spoken about this in my previous blog “Niche banking services: It’s the icing that matters” as well. Banks have identified 2 key factors for which, it is important to acquire these young users and acquire them soon.
First, the segment represents a sizable business opportunity and is an extension of the bank’s existing customer base, thus reducing the bank’s effort and cost associated with customer acquisition. Secondly, acquiring these customers at a young age allows the bank to invest in a long-term relationship. This is easier said than done though.
A lot will depend on the bank’s ability to understand the distinct demographic and behavioral characteristics of the young customer and use it while formulating their product and engagement strategies. For instance, mobile platform is steadily emerging as the preferred engagement platform for the youth. The dominance of mobile in financial transactions has been revealed by a survey done by Accenture consulting where they found 41% of the banking users in the age bracket of 18-24 using their mobiles for checking balances. KPMG cites that the lines between banking and the digital world are blurring and predict that they will soon disappear altogether (Refer this article). With these young users showing an increasing propensity to consume digital services via mobile phones only, I believe an app based UI will be ideal to offer such financial services to the youth.
While the bouquet of financial services offered to the youth and the UI of the solution will be important, they alone, will not be the key factors driving customer’s stickiness in the long run. The youth will not accept anything less than the complete suite of transactions at their fingertips, however the success of the youth banking solution and thereby youth’s loyalty to the bank will hugely depend on the continuous engagement a bank is able to drive through their platform. If a bank’s mobile app is able to merge their existing suite of financial services with an engagement zone that offers an interesting combination of games and social interaction, they will be able to drive more traction for their Youth banking solution. A thoughtfully designed gamification zone can not only drive a traction for the bank’s app with in the young users, but can AND should also be intelligently used to enable these users to develop a financial acumen.