How Banks Should Start Preparing for 2050
Nobody can predict the future, but Apple and other forward-thinking companies have demonstrated that you can help create it. The banking industry is faced with numerous changes that are challenging banks to envision a future that looks quite different from the way we bank today. Before banks can seize the opportunity, embrace change and shape the future of banking, it’s important to look at the future customer and try to see from their perspective. Given that many of them are still in junior school this may seem like an impossible task. However, given what we know about Millennials and Generation Z, we can predict the rise of specific directions with a strong degree of certainty. And given the behaviors and trends happening now, we can make some educated suppositions about how those behaviors will play out as technology advances and these generations grow up and have families.
In this white paper we discuss four directions we see think are important for banks to consider if they are to become a bank of the future. We will consider how changing demographics of age and cultural diversity will impact banks, un-met needs that can differentiate banks from online-only competition, and how banks can best use new technology. The big news is that no longer will banks be able to rely on a one-size-fits-all approach – growth will be found by catering to niches, personalizing and customizing services and offering financial advice to key segments. This requires a major shift in approach and thinking, but those who are willing to see that there is a huge opportunity in such shifts will become tomorrow’s industry leaders.
How will tomorrow’s customer be different than your customer today? Aging boomers now outnumber children in Canada, population growth is being driven increasingly by immigration, and Generation Z will be the most diverse generation we have ever known on the planet. Home ownership is no longer a given, entrepreneurship is a Millennial state of mind and there are people on the planet who saw the invention of the radio and those who have never been without the internet. The economy is strained, global tension and environmental concerns are amping up. Like Generation X, Gen Z will be less idealistic than Millennials, and as Millennials have children their habits are evolving. Here we recommend four key considerations for banks to address the needs of these changing customers.
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