In the early 2000s, paying university fees meant dressing up and making a trip to the bank to deposit the money in person, and of course, the visit was laced with the greater respect of “where money lives.”
Fast forward to today, and the ways of banking have significantly changed, and the future of money is here with us. Modern consumers can effortlessly move money from their bank accounts to mobile wallets using basic or feature phones, while the more affluent transact through their wearable devices. As technology continues to evolve and
customer needs become more specialized, the future of money and finance promises an even
greater transformation.
Similarly, it’s hard to imagine a time before television became ubiquitous. Today, many people consume content on smartphones and tablets, but for decades, TV sets were the primary source of news and entertainment and perhaps those from this generation remember the notion of ‘getting home in time for news’. This rapid adoption of modern-day content consumption trends parallels the current shift in money and finance, where forces create an urgent need to act. As an example, a purchase event for a modern-day consumer at a physical store starts with
digital shopping (the old-school window shopping) 80% of the time.
The new generation of savvy consumers is shaping the landscape. Their evolving preferences and consumption habits are driving industries to innovate. Supported by technology, the Next Generation (NextGen) consumer offers banks a wealth of opportunities to revolutionize service delivery and drive sector growth.
The NextGen consumer is not defined by age, but by need. According to EY’s 2021 consumer banking survey, the rising expectations of consumers and an increasingly competitive landscape are pushing the need for transformation. These consumers, characterized by high smartphone penetration and internet access, engage with brands through social media and apps. This presents banks with a clear opportunity to meet their needs through technology-driven financial solutions.
However, despite their tech-savviness, modern consumers still value human interaction for empathetic transactions. This dual preference highlights the growing need for a seamless blend of ‘bricks and clicks’ the idea in banking that physical branch banking will remain complemented by digital finance.
The evolution of consumer expectations has elevated digital banking from a convenient option to an essential service. At the top of their priorities, the NextGen consumer enjoys banking on the go and has a deep desire for human connections, bringing the greater need for banks to humanize as they digitize.
In response, the banking sector is rapidly evolving with personalized digital banking while positioning their brands accordingly, while at the same coming along with intact human interactions with consumers. Apps like Timiza allow both Absa customers and non-customers to access short-term loans, create savings goals, and secure insurance via
mobile phones., while at the same time at Absa, we are driving expansion in my branch network, while investing in communication technologies that make it easier for consumer to speak to their bankers – a real human being.
Mobile banking not only offers an unparalleled opportunity for banks to elevate consumer engagement but also deliver personalized banking experiences. To truly capitalize on this potential, banks should extend their apps to comprehensive wellness and lifestyle content. This could include features like financial health monitoring, personalized financial advice, and even access to wellness resources.
Furthermore, leveraging the Internet of Things (IoT) can enable seamless interactions making banking an effortless part of everyday life. By incorporating these elements, banks can create a holistic digital ecosystem that not only meets the financial needs of customers but also enriches their overall lifestyle.
Additionally, the NextGen consumer values a sense of belonging to a community, or a tribe. They want to connect with financial services in their preferred spaces, creating a greater need for embedded finance.
The role of banks within the social fabric has undoubtedly evolved, becoming orchestrators of diverse services that extend beyond finance to include healthcare, education, and government services, all accessible via mobile banking platforms. Emerging technologies have the potential to deliver more customer-driven solutions, enhance financial literacy, and improve fraud detection among other capabilities. Innovations in these areas will ensure a superior banking experience and a more holistic approach to financial well-being.
To embrace this new age, banks and the core will need to consider that for the NextGen consumer, banking is not just about managing money; it is about embedding finance into their everyday lifestyle to the point where “finance” becomes a natural part of their greater lifestyle, where finance plays a supporting cast and a ‘by the way’ to consumer greater stories. As we envision this age, we anticipate an increasingly digital, interconnected, and conscientious world.
By Moses Muthui, Consumer Banking Director, Absa Bank Kenya