Bank to the Future: where we’re going, do we need banks?

A storm is brewing in the banking industry. With changes to banking regulations, advances in technology and global economic shifts, consumer behaviour and expectations of banks have drastically evolved. This evolution is being led by today’s young consumers who represent the banking industry’s biggest challenge and greatest opportunity.

With my #RebelThinking colleagues, I’ve spent the past four months researching in UK and Spain about these young consumers, aged between 16 and 25 (named the iGEN), to understand their behaviours, attitudes and frustrations when it comes to everyday banking. For us it’s a very important age group – stuck in between Millennials and Gen Z, what we used to call ‘young people’ have become overshadowed by multiple reports and studies focusing only on Millennials, who have now all come of age (the youngest Millennials are now 20) and make up the majority of the global workforce.

I’ll go through some of the major findings here (we presented the UK results last 11 November). But if you’d like to dive deeper into the results of this iGEN banking study, on 29 November we will be presenting the findings of our Spanish research, to understand how Spain’s 16-25 year olds view everyday banking.

After the presentation, we’ll have the opportunity to to chat about the results with some of the leaders of the industry:

• Fernando Egido, Deputy CEO, Self Bank
• María José Jordá, Head of Customer Experience Transformation, BBVA
• Felipe Martín, Director de Marketing, Banco Santander
• Mar Comesaña, Directora de Marketing y Business Development & Advertising en EVO Banco
• Eduardo Ortiz de Lanzagorta, socio y consejero, Civeta Investment
• Néstor Palao, Cofundador y Chief Product Officer, Bonsai.cash
• Pablo González Ruíz de la Torre, Fundador, Pangea
• Blanca Gema, Participante estudio iGen

Our research methodology took a three-pronged approach, starting with immersive techniques (group workshops and interviews) to develop empathy with the consumer and to provide inspiration to shape the research. Then we used large-scale quantitative data of over 22,000 UK iGENs to tell us the what. Finally we used our online insight and co-creation community Hark for deep human insights to fully understand the why.

We worked hard to get under-the-skin of what the survey data told us; to understand the real pain points of the iGEN’s experiences of everyday banking and get the real human reaction to an industry they feel disenfranchised from.

One of our key findings was that when we asked our iGEN participants what the recipe for their perfect bank was, it became clear that their immediate need is not for futuristic fintech solutions or a bombastic blockchain revolution, but just for banking to work. They just want the experience to be much less stressful and evil than it currently is. Many iGEN consumers really struggle to understand why banking is so difficult and frustrating, especially when their customer experiences with other services are so much better designed and implemented.

We identified six major pain points, summarised here:

Our iGEN panellists don’t see their future banking solutions in terms of the technology involved, or use words like ‘fintech’ or ‘mobile wallets’. They think about them in relation to the outcome and improvements they will make to their lives.

In order to address these pain points, and to synthesise the consumer insights from our iGEN research, we have developed a simple strategic framework for the iGEN’s bank of the future.

The bank of the future

There are four tenets to the bank of the future framework; convenient, smart, transparent, and supportive.

• Convenient: “I don’t have to think about it. This bank makes it easy and is a pleasure to do business with.”
• Smart: “This bank understands my unique situation. I’m happy to share my personal data because I get a smart, tailored service.”
• Transparent: “I trust this bank, I feel it has my best interests at heart. For the first time I don’t think my bank is out to get me!”
• Supportive: “Finally! A bank that speaks my language and helps me manage my money responsibly.”

Working together for a better bank of the future

Over the last 18-24 months the world of banking has started to be turned on its head. Not just by developments in fintech, but also because the regulators have jumped on the bandwagon. In Europe, PSD2 is demanding an opening up of the traditional banking infrastructure. And in the UK that process is anticipated to be faster than in any other market on the planet.

From the perspective of the key findings in this report, Open Banking certainly represents a significant step forward in addressing the pain points, hopes and desires of the iGEN consumer.

If you want to know more, please watch this space because on 29 November, after the presentation, we will be launching the findings of our Spanish and UK iGEN research, to understand how 16-25 year olds view everyday banking.