Banking on the future

Banking on the future

What will the bank of the future look like? How will customers manage their money in 20, or even 40, years’ time? In this age of imminent change, is it even possible to guess?

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KPMG Australia

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Expectations of the Gen Y professional

Certainly many banking executives are struggling to decide where their business should be best placed only 12 months from now. It is understandable. The impact of digital technology has been vast and swift and entirely transformational.

Yet while banks try to keep up – and ahead – in the short to medium-term through the latest technological advances and innovative plays, they must also carve out a long-term strategy for themselves. It is about readying your business for who your customer will be tomorrow – whether that is next week or next decade.

Generations X and Y will dominate the financial space over the next couple of decades.

Today's young professionals will be significant drivers of retail banking revenues tomorrow.

Think of customer demographics as a pipeline of sorts – as people are moving into retirement at one end, a new cohort of young men and women is entering at the other, to embark on what (for most of them) will be a 40 to 50 year experience as workers, consumers, savers, borrowers and investors.

This idea lends itself to two key points:

  • Young professionals today will be significant drivers of retail banking revenues tomorrow.
  • Understanding what this group wants will differentiate the winners from the losers in the race for the retail banking space.

In this context, KPMG set out to survey and hold focus groups with our Australian young professionals between the ages of 18 to 30. We see this group as particularly interesting as they are a strong representation of future premier and private banking customers.

Key findings and implications

  • The Gen Y cohort is diverse and somewhat heterogeneous.
  • Digital will remain king. 
  • Understanding behaviour is necessary to drive adoption.
  • Online research is the prevailing way that young professionals research and choose their financial products. 
  • Leveraging social media in creative ways will give banks an edge.
  • Gen Y wants to stay in control and be empowered with their own finances.
  • Security measures are a bore, giving rise to ‘invisible’ security. 
  • Focus on savings first, wealth later. 
  • Young professionals are cost conscious. 
  • Young professionals are shifting towards holding financial products with more banks.

Characteristics of the bank of the future

There were four clear characteristics that were unearthed around what young professionals want in their ‘bank of the future’. Ultimately customer centricity and innovation were placed at the heart of the business.

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