In our study Bank To The Future, we analysed the problems our iGEN study participants face with everyday banking and categorised them into six major pain points. Major pain points present huge barriers to iGEN adoption and trust of their banks and the banking industry in general. The major pain points represent the human feelings and attitudes of the iGEN in the UK today, and are the reasons this group of consumers feel that banking today is not relevant to their needs. Banks that can tackle both these pain points stand the chance of becoming more relevant to the iGEN and building affinity with them.
1. The language of finance: “You don’t speak my language”
The iGEN express a lot of frustration when entering the world of banking and financial services, because of the way account services and terms are presented to them. The language of banking is something they are forced to learn rather than instantly connect with.
They feel that the odds are against them from the start and it is difficult to find the information and advice they need to make smart decisions with their money. Many are unfamiliar with even the most commonly used terminology like Current accounts, or the difference between Debit and Credit cards. Add to this the jargon and never-ending terms and conditions and it makes these consumers feel like banks have something to hide.
But it’s not just direct translations and explanations of terminology that the iGEN need; they’d like a more open and impartial conversation about the financial options available to them. The iGEN does their research online before buying and this includes financial products. But for big money moments they want to also talk to someone face to face. So many iGEN consumers currently go to their parents as a first port of call for financial advice partially due to their lack of trust in banks but also because of the barriers that banks themselves have created between them and their younger consumers. When talking about what they wanted from their bank, the topics of clarity, simplicity and transparency in communication came up frequently.
The risk of not providing younger consumers with a less alien way of communicating banking services is of increasing the disconnect that the iGEN feel between themselves and their banks. Banks that don’t speak their consumers’ language create a feeling that their products and services ‘aren’t for me’ which in a competitive market landscape is a big risk to take.
2. Lack of personalization: I’m just a number to you
The iGEN are savvy consumers and are very open to switching to a new bank or simply opening a new account elsewhere if they feel they can get a better deal or feel more valued at another bank.
Over time, instead of building a stronger connection with their banks many iGEN consumers feel undervalued and forgotten as their bank chases new customers. They feel that interest rates, cash rewards, other benefits and other incentives do not reward loyal customers but are only there to attract new customers. This leads savvy iGENs to switch entirely or to open new accounts and move their main financial dealings to the bank offering the best incentives, letting their old accounts lie empty and unused.
However the feeling of being undervalued and overlooked is not just about preferential rates and rewards elsewhere. iGEN customers that have been with their banks for some time feel that they deserve more of a personal service once they’ve demonstrated how they manage their money.
They feel the amount of data that banks build up on the personal finance habits of their customers should be put to better use by offering personalised recommendations and advice. iGEN are more likely than older consumers to forego some of their privacy if it means a resulting increase in relevance and personalisation, and they don’t understand why banks can’t treat them in a more tailored way, given all the data they have on them.
The iGEN want their bank to pay attention to their unique needs and situation, and to treat them as individuals rather than treating every customer in the same way.
3. Exploitation and distrust: “I feel like you’re out to get me”
Many of the UK iGEN consumers we spoke to felt that banks were working solely to serve their own interests rather than protect those of their customers. They feel that many banks today have been designed to trip up the vulnerable, and lead them into financial traps that are difficult to get out of.
Although not all iGEN feel discriminated and preyed on by banks because they are young, there is the common view that banks treat those with less money very differently and the nature of being young puts them into that category. This is especially the case for iGEN consumers about to leave or that have recently left university, feeling the weight of debt and the pressure to earn.
Even those without huge student debts but that have small or irregular salaries and minimal savings feel marginalised. Many iGEN consumers spoke of being charged account fees because their regular payments into their current accounts weren’t high enough. And with more young people making their money in less traditional ways, starting their own businesses and freelancing, this pattern is not set to stabilise.
For those young people who see themselves as vulnerable consumers, especially those that feel targeted by banks who see them as unstable and financially profitable, clear and transparent face to face contact is even more important. They want a real person they can trust to ask questions and give them straight answers, and who they don’t think is trying to set them up to fail.
4. Banks look down on young people: “You don’t trust me, do you?”
Younger people are well aware of the controversies surrounding modern banking and traditional financial institutions. While participants noted that this sort of corruption does not affect them on a day to day basis, the underlying feeling of distrust continues to affect the relationship they have with their bank. Throughout this study we have highlighted a general lack of trust amongst iGEN toward banks and financial institutions (in fact, institutions in general). By now this is probably not a shocking insight to read. But what is interesting is that this sense of distrust swings both ways. Not only do iGEN not trust banks, but they feel that banks do not trust them.
Many participants in our study felt untrusted and manipulated by banks. They say they are looked down on because they are younger and have less money. They are discriminated, or exploited because they are not trusted to take care of their money. They felt unwelcome in this adult world and undervalued as customers.
When in fact, the iGEN are crying out for banks to take them seriously and provide them with the tools they need to manage their money responsibly. They believe that if banks behave fairly towards them they themselves have a responsibility to become accountable for their finances. But iGEN consumers recall touchpoints with their banks when they have been treated with disdain by customer service agents, overlooked, generalised or patronised simply because of their age or their current bank balance. They really don’t want to live up to the stereotype they feel is placed on young people but want more support from their banks to help them to do so.
5. Technology: “Your technology is so limited”
The importance of technology to the digitally-savvy iGEN audience cannot be underestimated. To these young people, effective and convenient technology solutions make or break a bank, frequently representing the most important factor when choosing a new bank or product. If a bank doesn’t keep up with the platforms and solutions that this audience expect, they will be seen as behind the curve in all regards.
Seamless mobile banking that offers the same functionality (and more!) as online banking i.e. via a desktop is where iGEN consumers want their banks to focus efforts. They would happily use mobile banking only over desktop/online and certainly telephone banking if the apps allowed them to do more than check their balance and transfer money between their own accounts.
Compared to what they can achieve through their mobile phones in their interactions with brands in other sectors, banking apps are way behind the curve. The limitations are major frustrations and are important enough to iGEN consumers to switch banks. Where mobile apps aren’t up to scratch, and this is often the case with major traditional banks, iGEN consumers are looking elsewhere. Many talked about switching to online only banks that invest their money in improving their technology rather than spending it on bricks and mortar.
Whilst mobile banking apps are the top priority for iGEN, they also want their banks to keep up with technological developments in payments and money management. Having below-average technology for something as important as their everyday banking is a real issue for iGEN consumers who are used to being able to do everything from their mobile phones. Sophisticated mobile apps are not only nice-to-haves, but must-haves.
6. Banks make it hard to do business with them: “I have to jump through so many hoops”
Seemingly simple tasks really frustrate iGEN consumers when they turn out not to be simple for them at all. iGEN participants expressed frustration with the outdated processes some traditional banks have in place for closing or opening accounts, problem solving and fraud protection. Study participants talked about the friction and long waiting times to solve problems that in their minds should be fast and easy to fix, blaming old-fashioned systems and clunky practises that aren’t suited to modern banking.
iGEN customers would rather not have to speak to anyone and not have to fix anything; they just want their bank to work seamlessly for them. But when they do have to speak to their bank to sort out a problem, they really hate having to phone up. They would always rather use online chat or go into the branch to speak face to face than have to phone their bank for support. The phone is really seen as a last resort, for emergency situations.
This consumer group that values instant gratification simply can’t understand why certain tasks are so difficult. When talking about their ideal bank, simplicity was an often cited quality. Banks that achieved simplicity and efficiency without taking too much time from our participants were praised and appreciated for it.