33 percent of millennials don’t think they need a bank

According to the Future of Finance report by Goldman Sachs, 33% of millennials do not think they will need a bank in the next five years[1]. In fact, according to the Millennial Disruption Index, 73% of millennials are more excited about new offerings in the financial services space from the likes of Google, Apple and Amazon. Moreover, 71% would rather go to the dentist than listen to what banks have to say[2]. So how do banks convince, engage and make themselves relevant to this unbanked population? And why is it important for them to do so?

By 2020, millennials, one of the largest generations in history, will be dominating the workforce, moving into their prime spending years and reshaping consumerism - forcing companies to rethink the way they do business. One problem facing banks is that millennials view brand loyalty differently. This group is concerned with convenience, simplicity and innovation. Also, in recent years, we have seen non-financial institutions such as tech giants and start-ups challenging the status quo and tapping in to this unbanked populatione.g. through Apple Pay, Snapcash etc.

Tech companies have benefited from gamifying the product and user experience. After all, gamification has been used by schools and parents alike for centuries as a tool to educate young people. Quizzes, riddles, crosswords and puzzles make learning more interesting. But what is gamification in the digital sense? It requires using game thinking and game mechanics in non-game contexts to engage users in solving problems in order to encourage contribution and participation.

Ipads and tablets have given rise to a new type of gamification. For example, E.ON energy have developed a gamification based programme which allows young people aged 5-16 to make virtual decisions throughout the various stages of energy production including about distribution and consumption so that they can see the effects of the decisions they make[3].

Gamification can also work for banking to help them engage and interact with the millennial generation.

1. Applying game mechanics to real life scenarios - allowing virtual decision making in order for participants to see the effects of the decisions on financial wellbeing.
2. Designing simple and easy games tailored for particular age groups to foster an appreciation of the value of money, importance of saving, planning and budgeting.
3. Creating practical financial products that can be used alongside gamification to create real engagement and promote hands-on experience

To me, gamification is a new way to entice both interested and non-interested millenials in banking, as it makes financial education fun. Gamification does not rely on internal motivation, but rather on providing instantaneous feedback and incentives, and rewarding tiny steps of progress, which in turn ramps up engagement with users. Financial education no longer needs to be a boring classroom activity, but a virtual reality experience.

By Akshay Ketkar, Manager at iBe

You can read the first blog in this series by clicking here.

[1] http://uk.businessinsider.com/millennials-dont-think-they-will-need-a-bank-2015-3

[2] http://www.millennialdisruptionindex.com/wp-content/uploads/2014/02/MDI_Final.pdf

[3] http://www.eonenergy.com/About-eon/EnergyExperience/658

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