How can banks WOW the next generation of wealth?

Some might still perceive millennials as a generation of teenagers obsessed with avocado toasts and fancy festivals. However, the upper bracket of today’s millennials are now almost 40 years old and many of them are entering their prime spending years. Over the next three decades, millennials would have inherited 30 trillion US dollars, and by next year they will make up 50% of the total global workforce.

Millennials will only give banks one chance to impress them. Banks need to act fast and reposition itself now to attract future customers and build ongoing relationships with them – even if this means taking short-term losses for sustainable long-term profits. Unfortunately, most of today’s private banks are far from being ready to satisfy this generation. Our global customer journey study finds that 60% of millennials are dissatisfied with their current financial providers. Millennials perceive today’s customer experience to be poor across banks.

The study, which surveyed nearly 650 high net worth millennials worldwide finds that across the board, an overwhelming 58% of millennials would consider leaving their main bank in the near future. To top their dissatisfaction, this generation is not loyal. On average, each millennial has over three banking relationships. To win the next generation of wealth, banks have to optimise all the touchpoints that millennials experience to fulfill their needs. Banks need to re-wire their capabilities and processes to re-build a new bank that put millennials’ values at the forefront of their thinking.

Ensure Millennial-RM match
As an industry that prides itself as a people business, private banks cannot forget the criticality of interpersonal relationships. Clients want committed, like-minded investment advisors who speak their language. However, most relationship managers today risk losing the hard-earned trusted relationship that they have previously built because they lack the right capabilities to connect to their client’s children. In fact, one study finds that 66% of children would change their financial advisor upon receiving an inheritance. One of the measures that banks can take is to optimise the process in which they match advisors with clients.

Bring digital to the party
Inevitably, Asia’s rapidly growing private wealth will be transferred to millennials who are used to a high-degree of digital self-service capabilities. Almost 90% of the surveyed high net worth millennials are currently using or are planning to use some form of online trading solutions. Currently, over half of the respondents’ wealth are already being managed by a digital arm such as online investments and robo-advisory. Banks will struggle if they do not accurately allocate digital investments towards engagements that have specific and measurable outcomes for their clients.

Highlight the WOW factor
Our survey reveals that a low price offer is not the most important factor that millennials look for when it comes to financial services. Banks need to transform their practices and ‘WOW’ millennials. Our survey has identified eight ‘WOW’ factors that wealth management services can offer. An example of this ‘WOW’ factor is that millennials don’t want to receive spams. Banks need to ensure that they only give tailored recommendations.

Furthermore, customer ratings significantly matter to millennial consumers. Today, reviews done by peers influence almost every kind of purchase, starting from simple ones like eating out to life-changing decisions such as which mortgage lender to choose. Our Rating Economy study finds that thanks to ratings, 51% of consumers feel that they get more value for their money. Therefore, banks have to develop a sound approach to exploit the power of word-of-mouth marketing. Are millennials still willing to rely on the big three credit rating agencies? How do customer ratings influence investment decisions? How can banks incorporate today’s rating economy into their practices? How can product catalogues be presented in an appealing and customised manner? To address these questions, banks need to develop a prioritised business and technology roadmap, offer end-to-end self-service capability tools, and foster a millennial-centric culture. The supertrend towards millennial domination will continue, and millennials are turning to those providers that can offer them the maximum satisfaction at the highest quality.