Implications: Having had the chance to interview several banking executives over the past few years as part of our Industry Insights initiative, I know that one topic that is forefront to the banking industry is relatively sparse presence of young customers. Here’s what I mean:
Younger customers, at worst, have learned to live and manage their finances without the (consistent) use of a traditional bank. Banks are now competing with car dealerships for car loans, home improvement stores for home improvement loans, insurance companies and employers for long-term investment options, and check-cashing services and for those times when folks just want a little cash. Competition is coming from everywhere.
Many younger customers, at best, have automated their banking relationship to the point where no real “relationship” actually exists. They use direct deposit to manage their paychecks, automatic or online bill paying instead of writing checks, and ATMs as a place to grab a little cash. The good news: Banks have created a very cost-efficient operating model that requires little or no human intervention and overhead. The bad news: Banking service has become a commodity, rather than a relationship to be built on.
The reason I bring this up? The Ally Bank effort must almost certainly be aimed at this millennial- and middle-aged consumer segment. (At least for now, you’re not targeting seniors if you’re using Twitter.)
Will the next generation of consumers use your company, products or services in the same way the last generation did? What adjustments could you start making now, for consumers that have adjusted their habits when buying in your category?