Designing digital banking for different demographics

Technological advances have transformed the financial services industry in recent decades, leading to significant changes in the way people manage their money. Retail banking is now rarely confined to a physical branch, with more and more people relying on online and mobile services – a shift that was accelerated by the COVID-19 pandemic.¹

In the past, banks tended to develop digital experiences that were largely aimed at tech-savvy younger generations. But this can be seen as simply the first phase of a much broader shift: the digitalization of services across the board means that people of all demographics are now open to online banking experiences, as long as they are provided with meaningful customer journeys that strike the desired balance between physical and digital banking. Here’s how financial institutions can go about creating such “phygital” customer journeys, ones that are right for their targeted demographic groups. 

Appealing to – and retaining – tech-savvy Gen Z and millennials

“Zoomers” (members of Gen Z) and millennials have dealt with the uncertainty that comes with growing up with climate change, geopolitical upheaval, and major financial crises. Unlike older generations, they tend to view financial institutions as intermediaries rather than trusted partners, and are quick to switch from one bank to another.² They are also the biggest consumers of fintech services, meaning traditional retail banks need to work hard to keep up with so-called neobanks, which often offer services specifically aimed at these younger generations (born after 1980).

But that doesn’t mean a cleverly designed app is enough to satisfy them. While tech-savvy under-40s seek out the convenience of connected experiences, they also appreciate occasional human contact – sometimes to the point of heading back into good old-fashioned brick and mortar bank branches if they can’t find what they need online.³ Customer journeys designed with millennials and Generation Z in mind should offer simple, practical solutions grounded in an effective omnichannel experience that provides seamless connections to human agents when needed.

Boomer consumers: surprisingly open to digital banking

As baby boomers approach or enter retirement, many are worried about inflation depleting their savings as well as their ability to care for elderly parents and assist adult children affected by economic upheaval. As a generation, they’re in need of trust, reassurance, and a personal touch from their chosen bank, and tend to be attached – at least in part – to traditional financial practices, especially for major transactions.

But contrary to some perspectives, over 60% of baby boomers (whose ages range from late 50s to mid-70s) actively use online banking and are likely to continue to do so for some time to come.⁴ This provides an opportunity for banks to provide ever more personalized banking services, such as contextual alerts, customized advice, and spending categorization.

For boomers in particular, mobile phones provide online access to banking services when they don’t have access to a reliable internet service at home – especially useful for those in rural areas or with limited mobility. To further boost accessibility and build trust, banks can strive to simplify processes by offering services such as facilitated remote bank card activation and by clearly laying out product benefits.

High-net-worth individuals: seeking highly personalized solutions

Another dimension to the demographic picture involves the targeting of high-net-worth individuals (HNWIs) – those with over $1 million in liquid financial assets. Unsurprisingly, HNWIs are consumers of premium services and actively seek tailor-made wealth management solutions that take into account a fast-changing world.

But while one might expect them to favor personalized, managed services over digital-first solutions, that’s not necessarily the case. HNWIs are increasingly made up of digital natives and individuals who want to take a more hands-on approach to their investments. An EY study from 2021 highlights the growing attraction of digital engagement to HNWIs, with one in four already viewing digital tools as their first choice for engagement.⁵ In order to appeal to these clients, banks need to offer a customer journey that combines exemplary digital products, high levels of security, in-person expertise, and exclusive services.

The way banks interact with their customers is evolving fast, but one thing is common to all demographics: the convenience and speed of digital channels should be combined with a human touch in order to maximize engagement and ensure customer retention in an increasingly diversified banking landscape.

Published: 22/12/2022