In the 1998 bestselling book entitled, “Who Moved My Cheese,” Spencer Johnson told a story about how four individuals dealt with the disappearance of their “cheese.” It’s a simple little story about dealing with change but it is so applicable today in the banking industry.
Banking as we know it, is facing some major challenges…declining margins and profits, extreme regulatory pressures, shrinking retail sales and greater competition from “non-banking” companies. The banking industry has overcome similar challenges before… but what makes this more difficult, is the dramatic shift in their customer base. For the past 50 years banks have focused on building services and catering to the “Baby Boomer.” But as that group has declined in importance, banks are struggling to shift their focus to a new and illusive customer… “Millennials.” Those 92 million Americans born between 1980 and 2000.
So now the banking industry, that for half a century was driven by and for “Baby Boomers” must now try to make major adjustments in their products and services. Someone moved their cheese. If they are going to capture the millennial customers, they must make some changes to their business model, their infrastructure and most of all, to their mind-set. That sounds easy to do but as we all know, banks don’t make changes quickly.
Death vs. Change
To most banks dealing with change is about as tough as dealing with death. That’s why the Kübler-Ross model of the five stages of death matches so well with how banks deal with today’s challenges. Kübler-Ross model identified the five stages as denial, anger, bargaining, depression and acceptance. Unfortunately lots of banks today are mired in the denial stage of change. They refuse to believe that the sales and marketing tactics they used to grow their bank for the past 50 years will not work now. Oh they are making some minor changes but those are just cosmetic.
Two Key Changes
Based on my research, here are two key changes banks can make that would significantly improve their relationship with millennials:
1. Upgrade their branch staff’s tech skills…Millennials grew up with the internet and have little patience dealing with bank staff that cannot help them access or navigate the bank’s online services or mobile financial apps. They are bias to digital services and expect the branch staff to understand and appreciate that.
2. Give them the options not advice…Millennials don’t really trust bankers. So instead of giving them advice on what bank service they “should” buy, give them the options and let them make their own decision. They want bankers to do all the research and provide them with tools that will allow them to review the “facts” so they can make their own selection. And all of these tools must be available and easy to find and navigate online. This group wants more automated functionality so they can personally maintain their control over their banking and finance.
These two changes are more time-consuming than expensive to implement. But if banks continue to ignore the millennials they should just chisel on the branch wall… "If You Do Not Change, You Can Become Extinct!"
For more innovative ideas about how to find your bank’s cheese and improve your relationship with millennials, contact me at firstname.lastname@example.org