What Do Young & Wealthy Clients Expect From Their Banks?

By Vinayak Deshmukh | Oct 10, 2022

millennial client engagement solutions

"Hey, dad. Good morning". "Good morning". While chatting with her dad, the young lady gets a notification on her mobile phone. As she leans forward to pick up her mobile, she glances at the WhatsApp sender. "Oh no! I am fed up with this", says the frustrated daughter. "What happened dear?" asks the father."It's the same boring message from my bank. They are offering me a home loan with an additional discount rate of 1%. Don't they understand that I am currently looking at higher education? I don't even care about home loans at the moment" says the annoyed daughter.

What if the bank sent a message about an international education loan to the young client? The chances of her getting interested would be much higher. Instead, the youngster is annoyed because the bank is proposing products that she is least bothered about. Even more important is the fact that the father-daughter duo owns a multi-million dollar business. The wealthy daughter may get irritated to such an extent that she may start shifting her assets to another bank. She needs a bank that understands her. 

A different kind of approach is needed to cater to the needs of the wealthy, younger generation. Here are four things that young and affluent clients expect from their banks.

1. Hyper-Personalized Digital Experiences

The young, wealthy clients or “Millennials & Gen Y” as they are called, are digital natives and crave customized experiences at a deeper level. The wealthy young cohort also has diverse portfolio interests. According to BCG, "Personalization in banking should not be essentially about selling. It should be about providing bespoke services." It goes beyond just knowing a client’s age, gender and current assets. It's about going the extra mile to offer them tailored financial advice.

For example, one client might be interested in sustainable investing while another might be into cryptocurrencies. There needs to be an ecosystem that regularly learns more about the client. This helps in accumulating as much data as possible to help create & deliver hyper-personalized experiences. In the aforementioned example, the client looking for sustainable investing options should receive content related to ESG insights. Then, the bank can take a step forward and suggest investing in ESG funds. But for that to happen, they need to capture the client's investing preferences correctly.

personalization vs hyper-personalization

Ref: Difference between Personalization & Hyper-personalization

And “no” it's not enough to capture these preferences at the time of onboarding. Most probably the bank might have done this exercise when they onboarded her parents. And no one wants their father’s bank! So the only way for the bank to attract these young, wealthy next-generation clients is to offer bespoke, relevant hyper-personalized services and experiences.

2. Wow Moments - Traits That Win Millennials' Hearts

Let’s consider the father-daughter duo again. The daughter has now graduated from an internationally recognized university. She has just taken over a part of the family portfolio of $15 million. Soon after, she gets a call from her Relationship Manager (RM) saying "Hey, it would be my pleasure to continue being your RM. But I would also like to give you the option of selecting any other RM if you wish to". "Wow, this is cool" is what the daughter might say.

The "wow factor" is something that clients remember. In the above instance, even if the existing RM doesn't provide the option of selecting another banker, it's not going to reflect negatively. But a small change in client experience makes a massive change in the client’s perception. The next step in this case, for another "wow factor" could possibly be how the bank allows this rich client to choose how she manages her investments. Would she want the private banker to handhold her at every step, or would she want a complete digital solution to manage her part of the portfolio, or would she like to go with a hybrid approach - a combination of in-person and digital tools?

As per a Capgemini survey, more than 60% of HNIs are dissatisfied with their experiences when it comes to touchpoints like new product services or receiving educational information.

Also, more than 40% of respondents said that a good experience at these touchpoints would strongly improve their overall perception of the bank or wealth management firm.

capgemini world wealth report

Ref: Capgemini World Wealth Report

3. Omnichannel Service Focussed On Client Centricity

According to IBM, omnichannel service means enabling interactions across multiple client touch points where intents are captured, insights are derived and conversations are personalized and optimized. In turn, clients get better service because of this client-centricity. Banks and wealth management firms need to move from transaction processing to superior client engagement to stay relevant.

In the above instance, say the daughter plans to buy a new car and visits an Audi showroom. The bank can use location data from its mobile app to forecast future spending. It can automatically share relevant promotional offers about the car with her. This information about the client should also be made available to her RM. 

As a result, the RM can call or talk to her client to see if she liked the car, and if not, the bank can help her find promotional offers from other brands. The essence of this exercise is to help the client believe that the bank always cares about her needs, even though she did not take it up with her bank. Experiences like these, tie the insights gleaned from one channel to proactively offer personalized service and strengthen the HNI client-RM relationship.

4. KYC - Really Knowing Your Client

Whenever someone says "KYC", the first thing that comes to mind is the "formal documentation" required by banks at the time of onboarding, as well as updating the documents at regular intervals. Banks spend billions of dollars on this KYC process, but fail to leverage this process to really understand their clients. This definition of KYC needs to change. KYC should represent “really knowing your customer or client” along with the mandatory requirement of collecting documents.

To really know clients, banks and wealth management firms need to make use of data available across various touch points. This helps paint a better picture of the HNI clients’ needs and wants. At over 80 million strong compared with 76 million boomers in America alone, millennials are a large enough number that cannot be ignored. While many typecast them as young twenty-something who is carefree and single, there are a good number of them with well-established careers as well. Millennials are born between the years 1980-2000. So one needs to cater to these older millennials as well. This generation is open to sharing relevant data if it means better services and offerings.

The Right Time To Gear Up

In the coming years, Millennials are about to inherit a whopping $30 trillion. This is a digitally savvy generation. However, it does not mean that they don’t care and are ok with impersonal digital services. Millennials want to make use of their personal wealth to transform the world. They want to grow their wealth in a way that upholds their values and interests. They are looking for a bank/ wealth management firm that truly understands them and offers them client-centric digital solutions.