News

Behaviours of the ‘digital native’ generation ignored at our peril

16 May 2017


Comment from Andrew Martin, Chief Innovation Officer at Dunstan Thomas

Dunstan Thomas is making its 36-page report of findings from an extensive online survey of 1,000 millennials and 30 on-street video interviews available, in hard copy for the first time at the TISA and Corporate Comms Shop Joint Seminar entitled: ‘Robo-Pensions – The Digital Revolution’, taking place at 1.30-5.25PM on Wednesday 24th May 2017 at Hogan Lovells, Atlantic House, 50 Holborn Viaduct, London EC1A 2FG

Derek Quinnell used to be introduced as the three times British & Irish Lions tourist and Wales International of nearly 10 years standing. All three of his sons have had successful rugby careers, especially his eldest son Scott Quinnell. Scott played number eight for Wales for seven years was Wales’ captain for much of that time. Derek now gets introduced simply as ‘Scott Quinnell’s Dad’.

Top sportsmen have a more acute awareness of a ‘changing of the guard’. The next generation come through and they are forced out of the limelight at some point in their 30s. In business, this process is more gradual. Indeed, business careers seem to be lasting longer, one generation to the next. The Baby Boomer generation, (born between 1946 and 1964, aged 53-71 years old today) are only now retiring at a rate of roughly 700,000 each year in the UK.

The generation I belong to – Generation X – forms the ‘meat in the sandwich’, sandwiched between the Baby Boomers, and the Millennials. The Millenials were born between 1982 and 2004 and are now aged 13 to 35-years old. This generation are the subjects of Dunstan Thomas’ latest consumer study.

As the sandwich generation Gen Xers are able to look back to an apparently more certain, and perhaps more prosperous, period; and then forward into the digital world which millennials are already shaping.

Most millennials won’t even remember a period when websites, smartphones, and social media where not a key feature of our lives. For them, researching and buying products and services online is as natural as shopping on the high street is for Baby Boomers. This goes for financial education, financial advice, financial product researching, buying and administrating, as well as other aspects of millennials’ lives.

The reality is that for many younger millennials today, access to independent financial advice is a pipe dream. They are much more likely to use their banks’ online platforms and tools to self-educate and motivate themselves to reach short-term and even longer-term savings goals.

In our nationwide study of 1,000 millennials, in 2016, we found many millennials were already avid users of micro-investing platforms. They are also using an array of financial apps to carry out daily money management tasks like splitting shopping and utility bills between housemates or saving up for a summer holiday. In the future, if not already, they are going to be avid users of Direct to Consumer (D2C) platforms and robo-advice offerings.

They are going to engage deepest with providers which encourage and stimulate them to save for all their financial goals. In short, those with the best customer engagement strategies for this demographic will command their loyalty.

And customer engagement is not just about digital engagement. As we’ve already seen in the retail sector, it means developing seamless omni-channel (not just digital) strategies. Millennials may still seek face-to-face interaction to take trust to a deeper level as their savings and investment portfolios grow – especially if they feel they need regulated financial advice at any stage.

However, for most providers, customer engagement was previously left to their distributors. These are hundreds or even thousands of independent or ‘restricted’ financial advisers, who were gathering intelligence and then using it to advise and sell providers’ products. They kept close to their customers, providing new options and products as their personal circumstances changed. The dominance of this intermediary layer and the decimation of direct salesforces in the decade preceding RDR, makes today’s task of engaging directly with customers more demanding.

One of the keys to serving any customer better is knowing their circumstances and responding effectively to them. It is important to understand their hopes, desires, ambitions, preferences, and behaviours, addressing them in a language they understand, via channels they are comfortable using.

It’s critical for providers to know how much new customers are looking to save each month and when they want to have achieved a specific financial goal which makes their product(s) relevant. In this way, they can assist and encourage them to reach these goals and command their loyalty in return.

Insight from the interaction data from these new apps and portals must be put to work to help providers understand and engage with the next generation of customers better. It’s about building an iterative loop which builds better mutual understanding.

Engagement is not an option: providers and wealth management firms that don’t build digital offerings with millennials in mind, could be out of business within a generation. The time to start testing, learning and building financial guidance and planning applications for this generation is now.



Andrew Martin is Chief Innovation Officer at Dunstan Thomas

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