Back in the early 2000s, paying my university fees entailed making a trip to the bank to deposit the cash. Fast forward to today, and the ways of banking have greatly 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 specialised, 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.
The new generation of savvy consumers is shaping the landscape. Their evolving preferences and user habits are driving industries to innovate.
Supported by technology, the next generation (NextGen) consumer offers banks a wealth of opportunities to revolutionise 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, characterised 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 humanise as they digitise.
In response, the banking sector is rapidly evolving with personalised digital banking while positioning their brands accordingly, while at the same coming along with intact human interactions with consumers.
Mobile banking not only offers an unparalleled opportunity for banks to elevate consumer engagement but also deliver personalised banking experiences.
To truly capitalise on this potential, banks should extend their apps to comprehensive wellness and lifestyle content. This could include features such as financial health monitoring, personalised 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.
To embrace this new age, banks 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.
The writer is the consumer banking director Absa Bank Kenya
