Banking on Digital Growth
Banking on Digital Growth

Episode · 4 months ago

172) #ExponentialInsights - We All Love No Hassle: How to Entice Millennials and Gen


Feelings and emotions don’t usually have a place in financial services.

But people often buy and make decisions with their heart.

Our guest today is Doug Brown, President of NCR Digital Banking, a proud father, and an avid researcher into the habits of the Millennial and Gen Z demographics, and what they demand from their financial institutions.

Join us as we discuss:

- NCR’s extensive research into how younger consumers feel about their banking options

- Millennials love exploring the newest, coolest things in fintech

- Understanding the deeper wellness aspects of financial transactions

- Having a digital-first mindset across every channel

Doug’s team is using technology to solve people’s pain points and make moving money simpler.

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or on our website.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

It might not be obvious. That's why I think innovation and experimentation is really the key here. Bring people into the lab, let them bang on stuff and do things and see what you learn. That wasn't the hypothesis. Maybe you're out there. You're listening to banking on digital growth with James Robert Leigh, a podcast that empowers financial brand, marketing, sales and leadership teams to maximize their digital growth potential by generating ten times more loans and deposits. Today's episode is part of the exponential insight series, where James Robert Lay interviews the industry's top marketing, sales and FINTECH leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show. Greetings and hello. I am James Arbert Laigh and welcome to the one hundred and seventy two episode of the banking on digital growth podcast. Today's episode is part of the exponential insight series and I'm excited to welcome Doug Brown to the show. Doug is the president of Digital Banking at Innc our corporation and recently completed a study conducted with the Harris Poll that was framed around People's banking relationships and preferences. Welcome to the show, Doug. Thanks happening, James, before we get into this conversation in the research that that Y'all conducted, I always like to start off on a positive note. What's good for you personally professionally? It's your pick to get started. Hey, I'm just really happy that I'm in tune with this younger Gen z millennial mix they're going to talk about today, having two daughters that represent that age group. I think I understand some of it, some which I don't. That's why we engage in research on earth it and let's share the findings today and you and I talk absolutely and and that's one of the things that y'all did do. Over an NC are, you conducted some some research with the Harris poll, framed around the relationship that people have with banking, their preferences, and I'm curious what led to the study in the first place. Why focus on this? Why Now? Why is this important? We really good important because wonder how people feel about their relationship of banks, credit unions and then new alternatives. So not just what they're doing, what's their sentiment about it? Where the gaps. So I think there's an emotional connection as well as physical happening. So we wanted the research to go deep and understand the motivations and in sentences I like I like what you're covering this idea of feelings and emotions because I think it's one in the financial services space that we don't think about enough and and I understand why Baker's financial brand leaders, credit union leaders there are. They're typically very smart, left brain driven people, but when we're talking about the emotive we're talking about the right side of the brain here. People buy and they make decisions with their heart and then they justify some of that with their mind, but a lot of feelings and emotions goes into this. One of the things that you found in the study sixty four percent of millennial banking customers could consider leaving their... over the past year. Why is that? The primary culprit is they find some alternative they think is better. So they're drifted away because something looks more intriguing and interesting. So they have a propensity to go look at other things. But when you get deeper into their sentiments and emotion they would prefer to stay in the relationship that they know and trust, like a bank can accredit union. But they will be tempted. So that's where the challenge laws. Yeah, and when you look at this idea of temptation, what is tempt tempting them away to stray, to maybe look at all other alternatives? What's peaking their interest here? Well, sometimes there's they can do something cooler or new, so they're interested in trying that and experimenting. So I know some millennials like to go for some of the new products that are like a disposed will debit card model and they can control how much they spend. So it's a forced budgeting paradigm to them. They like that. So they think that's cool and different. As one example, some people think I need to move money different ways and they'll try some maps and have that. Some might like to invest in Crypto. So there's a multiple things that are distracting and tempting. But then once they get into it they find that sounds easy to use, not all those cracked up to be. Or, worse, they were influenced by maybe someone is not that deeply advised on it like their friends. Yeah, find out that wasn't the best path to take. The grass is not always greener on the other side and sometimes we have to learn through the school of hard knocks. And and I'm curious. So you know, if sixty four percent of millennial banking customers are considering leaving over the past year, you know, Shiny Object Syndrome, will call it. What's the opportunity here? What's the opportunity for financial brands to optimize and maybe even transform operating models business strategies to better serve younger generations of how they prefer to bank? I think it's about like they need on earth. What is the Intrigue Point? What's the attraction? Phenomenal? What is it? And then what can they do about to address it? So good example I'll bring to you is that one of our bank customers, they found that people really interested in refinancing their their current the current cards. Like I used these car out alone and at one level against can understand that there's some going on here. But what they've found was people really doing that because they wanted to build their credits for my hand installment loan model and they, you know, better than most other alternative. So when you find out what's the motivation behind it, it wasn't just simply some cash out on it. It was I really want to build that credit score. So when you understand the wellness aspect of what they're looking for, you're going to hit it head on better than any FINTAC or an alternative model as an option. So it's almost like identifying the problem behind the problem or the question behind the question. What's the deeper motivation in banking on digital growth? I wrote. You know, people wake up and they don't say I need an autolone, though they say. They wake up and say I need a car. And in this particular case it wasn't even about the...

...refi it was about building the credit score. And how can we flip that thinking within a financial brand, because I think it comes down to to human centered growth, because we get so enamored with our products, but it's like if we could put the focus on the people and serve their needs, that's where the massive growth opportunity is right it is. If the challenge ourselves, you said it on the front end of this unwhire our left brain and get to the right, Bryan, the sentiment side of it, and learn to ask like what are they really after? Don't lead with Oh yeah, I got a rate on a loan for you. Like what are you trying to accomplish and want? You understand that right, and they'll tell you. That's the amazing thing about this generation that we found in the research to they're willing to offer you coaching and guidance. That's a how to approach them. So we need to be open ears, open eyes, open heart, listen and act, I think, and you'd cute on this too, and you're opening remarks like you know we don't know what we don't know. Don't be afraid to ask, don't be afraid to have these conversations, because I think with this specific generation, millennials, and maybe even more so gin Z, you know, they have grown up in a digital world. They are sharing literally everything with the world, their thoughts, their feelings, their emotions. I'm curious what what might be a big misunderstanding that financial brands have about millennials? They maybe have about Gen Z, because they're ere even millennial and Gin Z. I think we use them in the same sentence a lot, but they're very different in their own thinking. Am I right? They are, because they have different milestone life events going on. Where they're at when it comes to homeownership and and family and the and the like. So they're exactly right. There's a big difference in there. So I think it comes down to like sniff that out, understand it, and it might not be obvious, and that's why I think innovation and experimentation is really the key here. Bring people into the lab, let them bang on stuff and do things and see what you learn. That wasn't the hypothesis maybe you're after. I like that. Bring people into the lab to collaborate together, because I think innovation done in a bubble it doesn't serve the greater good. Now we can cocreate, we can collaborate. I'm curious. Well, you know, one of the things you noted is this idea of a digital first mindset. What is a digital first mindset? What does it actually mean? Yeah, literally means not digital only. It means digital everywhere. So for a bank and crediting your model. When, however, I'm servicing you, James, I want you to feel like it's a digital, cool experience, whether you're coming into the branch or you're calling the call center or you're working on the APP on the phone. In every one of those challenge. That says we want it to be digitalized and cool, and so we call that digital first, for simplicity sake. What does that mean? That means I have a lot of data to help bring to you what's relevant. I know you. I personalize it and you just feel like you feel. Connection is what it's about. So...

...having that connection everywhere you interact with the bank or the Credit Union. That's digil first. And and I want to come back to a point you made previous two because you mentioned that. You know, people are are looking, they're flirting outside of their current relationship. More than half of banking customers, fifty nine percent, according to the resource that you'll did, said that people have relationships with more than one financial institution outside of their their PFI, outside of their primary financial institution. What's the threat here and what should financial brands be thinking about when it comes to not just acquiring, because I think that's only one half of the equation, but more so retaining those relationships over time using data? Yeah, so they know. The danger, of course, is that first part is they're sampling something else. They are more vulnerable to distraction. Something, something positive, negative, is going to intrigue them. So that's not good. I would say you got to raise the bar and what you're doing. So don't give them a justification or reason right to jump over there and then what they're doing is it. What are they doing and why are they doing at? What did they see over there? They're not seeing in you, and also in our research, you'll find, James, is that a number of times the banks and creditings actually had the thing they went looking for there didn't know what Exeptians had it. That's right. Yeah, so that's the paradox of like they don't think to ask you, they don't discover it. So now it's incomfing on you to make them aware, lead them to it, and when you do, I think you minimize that risk of that. There got to be tempted away. Digital growth is a journey from good to great, but sometimes this journey can feel confusing, frustrating and overwhelming. The good news is you don't have to take this journey alone, because now you can join a community of growth minded marketing and sales leaders from financial brands and fin text who are all learning, collaborating and growing together. Visit Digital growthcom slash insider to learn more about how you can join the digital growth insider community to maximize your future digital growth potential. Now back to the show. Well, I think one of those areas that you've covered in the research. He says seventy eight percent of Americans would rather use an fi than a tech company for PFM, for personal financial management capability. But if people don't know that exists, then they're going to go out looking elsewhere. And then you're also mentioned that seventy three percent of Americans would rather use an fi than a tech company for buy now, pay later services. What's the opportunity here? Back to your point of we need to create some awareness around this, maybe bring some new capabilities. But when thinking about you know, elements like Pfm, like bin now, pay later. What's the opportunity for financial brands to be thinking about well, I think they're in the best position to know a lot about these customers to bring it forward to them. So recommending and proposing a bin now, pay later when it makes sense. It doesn't always make sense. So I think the banks, incredibus, have a unique option of knowing more about you, a more holes stick relationship that they...

...can propose it at the right time and then they can also expand. By the way, that will help you with going back to the credits for building, example, wellness, cash flow management, the needs that they have. Again, because they have a longitudinal relationship over time, therefore, they're going to be better position to give you better things. So I think the onus is on the industry to come forward, recommend and propose at the right time, or that's find out, pay later, or these other examples I'm sure we'll talk about because we're going today. I think. I think you talked about by I'll pay later and PFM making recommendations. It's a proactive stance in the relationship, not being so reactive, and that's where, even utilizing some data, we can make recommendations down to a person's financial journey that they're taking at an individual level. Other opportunities that I think you know when reading through the research here that I saw was and I found an interesting three and five Americans, or sixty six, sixty two percent, would rather use an fi over a tech company for cryptocapabilities. Why do you think that is? Well, I think because Crypto is so new. It's kind of scary in a lot of ways. We hear about it from our taxi drivers and our barbers are walking around, but you don't really know what it's about, so you want to go to someone in the know. Bank spreduns, that that marker. So I think that's one reason. Secondly, as Crypto you know you're opening yourself up to a lot of data has to be provided. And who do you trust? Usually Trust your bank and when it comes to financial data, you trust your doctor. With your medical data, you're not to keen drop that stuff on the random third party things the web and on APPs. So that's a big driver of it and interesting to further in that study is that millennials and Genz each scored even higher than the average. They said I trust the Banking Credit Union at sixty six verse of the sixty two on average. So the ones are always skittish and skeptical right that like my daughters, they are the ones actually were saying, you know what, I want it from the name and grand I trust right, because they trusting, because they it is because they already have that established relationship. And you see a lot of like a coin base, for example, coming to market and then there's that whole point of aggregation there. But then there's also the the the threat of the relationship, but then there's the trust aspect and element that. You know what, I've had this relationship with my financial brand since I was, you know, five, six, seven, eight years old. Now I don't know, I'm not feeling so confident going out to one of these other players. It's interesting the psychology that that's that's coming into some of this. What what else surprised you when going through the data and what was shared from more of a feelings and emotion side of things. So, you know, we were talking earlier, as we start the conversation, like classics and the Classic predign Still Matters. I'll say yes, one example is they initially, you know, the the Gens, millennials, are really grivinged toward Venmo for... movement, like this is cool, we all ENMO. VENMO's a bank, right, like well, no, not really. and they didn't discover that till they graduated from college. They get off campus and realize that to send money to people other than on the campus and it's like right, oh, guess what, the rest of the world and a lot of this is not on Benmo. So what is Zel is, though, however, and so once they start using it, they're realizing it's like, oh, that's cool and it does the same way and it's even less hassle for me and more reliable. Right. And so that's where an example of like they still they begin to appreciate reliability, consistency and those things are really valuable and there's a little bit of, you know, awakening aware just has to go on with them. So I think you look at the that that age demographic and I think it's reflective of all age demographics. When you go up the curve right further gen x like myself, for boomers, it's like hey, we actually I'll have similar needs and that's what broad draws us in. So again, stay. How do we bring it forward? Make you aware of it. Easy to use, no friction, no hassle. The end of the day, we all love no house life, think, matter what age demo you are. So let's tap into that hierarchy need. There it is. It is the pattern matching. It's the pattern matching that comes back to basic human psychology. We all have questions of concerns on one side, we all have hopes and dreams on the other. As financial brands, the opportunity is to use technology to to provide prescriptions, cure solutions to people's biggest pain points, help the move beyond the present moment to get to a bigger, better, brighter future on the other side side, speaking about a bigger, better, brighter future, what do you see coming out of this research as some of the biggest opportunities that are available for creation, some to create something new or to capitalize on something that we already have available at a financial brand? I think there's a lot of availability for just payments, money movement concepts. We're teasing out some of the minutes ago, but people want this. Just want a simple way of when I have to pay somebody, I don't need to understand bank terms. Again. Let's unwhy ourselves from this language of banks. I call the I call it yeah, Ach Baker knees right, like, like what does it? What does that even mean? AC H so continue. Yeah, so I think it's like, let's get out of that nomenclature. Was He want to I want to send some money to somebody needs to get those quickly. I might be well to pay for it. I want it free, you know, just like simplifying the whole paradigm. Fundamentally, that's what is boiling through here, especially when that finding about. They were going somewhere else to go use something that already existed, yes, and they either thought a major, big bank had it, you know, or it was a Fintech. So I think there's a lot here. It just gets back to how do we break through the noise, get them to see it and make sure that the value proposition lines up to their their need hierarchy, talking about psychology here, that it's it's hitting the mark of what they're where, they're wanting to be met. Absolutely and and I think that idea of breaking through the noise one of the best ways I that I see to...

...break through the noise, particularly internally, because I feel like as financial brands, we probably make things more complex than what they need to be, and and that's that's the neat thing with with digital. Digital is a multiplier. It will multiply simplicity, but it will also multiply complexity on the other end of the spectrum. Thinking about the research, the findings, the opportunities, you know, back to your point on like money movement payments. What might be some road blocks that we can be aware of that could prevent us from maximizing some of these findings, these learnings from the research here. Yeah, you know what an example might be that we need to just get away from the conventional patterns, like people have always done it this way. Therefore they're going to know to do it like, for example, we know what bill pay is like. You know what millennial dens don't really understand built pay. Like. What is that? I don't even look at bills. And so why do we keep forcing a paradigm that's outdated and something rights in many of done sort I need to send money to somebody because I owe them as money movement. Yep, yeah, money exactly. So not built pay. So what does that mean? That means we need to unwhy are the experience and not say are you interested in built pay today or a bank to bank transfer? Like again, we're speaking a language that's a dead language. The many ways right that the wakeup call to us is like breakthrough that, approach them for what it is on their terms. They get it. When you do that, they're wanting to come to the banks and the creditings. That's what the research validates. Right, two thirds bus and every one of the instances were talking about today, saying that's where I want to go because I know it's going to be important it gets done and gets done right. So the road block is being aware of how we're thinking, being aware of how we're communicating, and does that truly resonate to the other side of the equation? And I think you know, even when I wrote baking on digital growth, I like this is a book about communication, this is a book about conversations, just how we communicate, how we have conversations. That's transformed over the years. Does this been a great conversation? I'm curious look at real practical here. As we begin to wrap up, I always like to send the deer listener off with a very practical something, an action item, something that they can apply going forward on their own journeys of growth and thinking about the research that you've conducted in some of the opportunities here, what would be a very small, simple, next best step that they can take, because all transformation that leads to future growth begins with something very small, very simple. What can they do next? James? I would suggest listen to the signal coming from the target audience that you're after. They're saying allowed and player to us. Do we have the capacity to hear it and turn it around. Experi vitation is a good thing. Innovation is about not just what you do,... you do it. So start small, bring a few in and see what you can learn from it and then act on it. Don't just make it a science. Experiment stops there. What are you going to do in the following phase and the like. So it's a discipline you got to keep exercising. Quite my guidance question for you on this, because this has come up in a couple of other recent conversations that I'm fault. I'm hearing some patterns here around innovation, for example, and if I think you maybe expand upon this, and we touched on it before, about bringing people into the lab, we'll call them client or customer or member advisory Boards that bring people into, have the in really facilitate these conversations, maybe on a quarterly basis or bi annual basis at least, just on a minimum, just an annual basis. What's your take on that? Because there's no better way to get close to someone then to have dialog and discussion and discourse. Yeah, I think some people exercise that, but again they're too limiting in the selection bias that goes on. They go get their customers and just ask the current customers, like, okay, yeah, that's a portion of it, but let's go grab some random college students, put them in a room and talk about these topics and see what they say and offer us. So I think there's a again where we're biased culturally legacy thinking. Break out of that. Make it half and half. And what you be again to see, too, is that the current customers also really have a low awareness of net new things, of what else they could want, so they're usually the worst ones to ask. That's the same time. That's again that's a great point, because it's like people don't know what they want if they have it, seen something else outside of that that horizon. I like that perspective. So go and maybe, maybe draw from a larger pool of people. Is that what I'm hearing from you? Not Precisely. And one of the things we like to do, for example, is hey, let's not talk about banking, but if, thank you could be like chick fil a or another vertical that we serve it in scar and what you find is there's so much similarity in the needs hierarchy, the articulation and what they're asking for. And again it's like not in the traditional wheelhouse. It's look to other industries of what's happening and flip saying this bavior and that's a digital is about. Digital is are pervasive lifestyle for you and me and everyone listening today, looking outside to grow inside inside, finding ideas and inspiration even even from other verticals, that we could bring into optimize and level up our own experiences. Doug, this has been a great conversation. If someone wants to continue the dialog, the discussion, even get the research, because I think that this is the it's important research here. What's the best way from the to a reach out and say hello to you. Be Get the research. Yeah, find us, wwwncrcom digital banking and look for me on Linkedin. Douglas Brown. Connect with Doug, learn from Doug. Get the research for sure. Empower elevate your own financial brand. Doug, thank you so much for joining me on another episode of baking on digital growth. This has been a lot of fun today.

Thanks, Jan's. Appreciate it as always. In until next time, be well, do good and make your bed. Thank you for listening to another episode of banking on Digital Growth with James Robert Leigh to get even more practical and proven insights, along with coaching and guidance. Visit Digital growthcom slash insider to join a community of growth minded marketing and sales leaders from financial brands and Fintax. Until next time, be well and do good.

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