With the arrival of the millennials (aged 20 to 35), wealth management is witnessing a historic generational shift in the recent times.
Analysing the trends pertaining to the rising significance of wealth management, Srini Peyyalamitta, Head of Banking & Financial Services at Aspire Systems explains the complete gamut, in conversation with Elets News Network (ENN).
Globally, millennials alone spend $10 trillion annually, and their personal wealth is estimated to grow to $59 trillion in the next several years, which is of unprecedented magnitude. Understanding generational differences are therefore crucial for banking firms to shift focus to millennials, and work to serve them in the ways they expect to be.
Different generations have different needs. While today’s senior citizens prefer personal interactions with service providers including banks, millennials prefer a multi-faceted approach that suits their always-connected lifestyle. Millennials tend to be more open and flexible in terms of choosing service models than any other generational group.
What do millennials want?
Millennials spend more time with technology, such as their smartphones. A Deloitte study reveals that almost 90 per cent of millennials check their smartphones within the first 15 minutes of waking up. Millennials are more interested than others in digital and mobile offerings, and love being in control of their financial decisions. This is the reason why they prefer instant, personalised advice delivered at their convenience. They shun time-consuming, cumbersome and complicated processes and expect their services to be available literally at their fingertips.
Millennials are also information-hungry, more educated, well-travelled and connected to the markets than ever before. This tech-savvy generation is comfortable doing their own research, and are quite risk aware. Millennials don’t necessarily demand discretionary services. However, wealth managers have a vital role to play as trusted sources of comprehensive, up-to-date and reliable information for their clients. Therefore, wealth managers need to ensure fool-proof facts by thorough research and due diligence to earn the trust of millennials.
How to win over the millennials?
One way firms and advisors can retain high net-worth millennials is by providing banking that is omnipresent and seamless across channels and devices supported by deep analysis. While operational efficiency and transactional competence is still important, the ‘always-on’, hyper-personalised online world has created a new set of expectations in their minds. To differentiate themselves, firms therefore need to offer swift, efficient and completely automated banking, with products that enable transactions online from anywhere, any time.
Wealth management firms must embrace the millennials with the perfect digital experiences that meet their exact needs. Gone are the days of ‘one size fits all’ financial advice. Wealth managers need to gain access to real-time information as well as master interactive investment tools to deliver highly personalised services. The mantra of automation and self-service delivery must be kept in mind for a generation that is self-assured and never tired of options on offer. And analytics will be vital in engaging with them at a much deeper level. As firms give away more control to their millennial clients, advisors would gradually evolve into decision validators who provide personalised solutions focused on outcomes. With access to granular insights, they would be able to break down an individual’s financial health and goals into much finer niches and serve them more reliably.
Leveraging the right technologies
Banks need an underlying system that can handle seamless, end-to-end coverage for millennials and ensure the ease and flexibility to access services anywhere, anytime in a tailored manner.Personalisation makes a real difference to this demographic, so digital engagement needs to be real-time and attuned to their most important life events.
Banks can really up their digital game and expand the omni-channel user experience with the help of holistic user-centric platforms, supported by analytics models. A customer-centric view that organises advisor platforms around the needs of financial advisors can really improve wealth manager effectiveness and slash costs. As the race to enhance the wealth management experience becomes even more competitive, the bottom line will be about adopting a client-first lens, employing design thinking and leveraging advanced analytics.
The article has been written by Srini Peyyalamitta, Head of Banking & Financial Services at Aspire Systems.