In the lead-up to the national ThoughtWorks strategy and technology roundtables, being held next week, global consumer trends analyst Babs Ryan said the problem with Australian financial services providers is that “[they] haven’t had to differentiate much or change frequently and rapidly to keep customers.
“That time of comfort is over as the digital generation leaves university and starts families,” Ms Ryan said.
In a statement to ifa, software provider ThoughtWorks said “a paltry 5 per cent of Australia’s Gen Y have a financial planner, 84 per cent do not think they need one, and a Nielsen global study of developed nations shows Australians are most self-dependent when making financial decisions”.
“The challenge for traditional banks and financial services providers is huge,” Ms Ryan said. “Nimble fintech players such as GoFundMe, investment app Acorn and P2P lender RateSetter are already threatening market share.
“In an environment of persistently low interest rates and a lack of global growth, Millennials won’t be won over on price point but by how effortless it is to interact with a financial services provider, and the lifestyle experiences they can provide access to,” Ms Ryan said.
“Financial institutions need to stop believing that customers must go to them. It’s time to reverse the distribution model and go to users in a contextual way that uniquely addresses their interests and passions.
“It’s a complete shift in mindset. For example, a 30-year-old on the birth of their first child rarely wants to buy life insurance. They will, however, need help getting a car seat safely attached in their car, for example, so see if you can tap into that. Or help them connect with paediatricians, babysitters, schools. Experiences matter more than things to this generation.”
Ms Ryan also emphasised that time is of the essence.
“Millennials won’t wait nine months for new mobile app features or another financial education tool. The trick is to be unique, build small, test quick, learn from live feedback, and pivot,” she said.
Well another 101 level article, who on earth scans this content prior to publication?
The fact that only “5 per cent of Australia’s Gen Y have a financial planner” probably makes sense as a Gen Y, at their current life-stage has no need for one, this is a fairly laughable comment. As they get older and their situations change then the need will arise. And one of the major events is that of the birth of the first baby, I completely disagree with the comment made that this DOES NOT trigger thoughts around self protection and the use of insurance.
“The trick is to be unique, build small, test quick, learn from live feedback, and pivot,†this is just a statement with no structure around it, PIVOT????? well this just confused me.
Nothing more than telling us how to suck eggs than wrap it up and present it as something new and thought provoking. The sky is falling down.
Common knowledge that the average Joe will only seek financial advice when a life event happens or is near, or something happens to someone they know. Few people wake up in the morning thinking “I need financial advice!”.
I bet if you did this research 20 years ago, you would also have found that a “paltry 5%” of Gen X had a financial planner too.
Wait till Gen Y start having a serious debt burden, young dependents and so on, and I bet that 5% will start rising quickly enough.
let them have the “effortless” risk management solutions. its called group cover via super or if you need more cover just tap a button and recieve instant “cover”. Just dont expect it to pay when you need it. The key is financial literacy. Im all for innovation but often the quickfix is a mirage and dangerous
So we should help them fit a car seat for their child rather than implement a risk management strategy that acknowledges their new responsibility. And on what basis would a financial institute compete with specialist car seat providers ? Ridiculous. Customer segmentation is the key for any business. Realistically, if they do not see the need to manage their responsibilities and plan their future there is no market. Its like Kygrios and the benefit of a coach. He refuses help. So why waste time trying to help. Move on. Assuming that all millenniums think/act the same is a huge leap.
Just another article that confuses Investment with risk…Investment is a commodity while risk is not