From simpler investment products and all-cash transactions to sophisticated technology-driven investments vehicles and online dealings – India has seen a sea change in the investment landscape, which calls for informed financial decisions rather than just parking the money in banks.
“Back when our parents were young, financial decisions were considered simple – either put your savings in a bank or hide them under your pillow. Banks were the sole custodians of finance. Fast forward to the 21st century and a shift in priorities and advancement in technology has heralded significant change in the financial landscape,” says Rajan Bajaj, CEO & Founder, Slice, one of India’s largest payments and credit start-up that exclusively serves millennials and GenZs.
The rapid change in the mode of financial transactions after demonetisation not only put the older generation off guard, even the technologically sounder younger generation – Generation Z – finds it challenging while walking on the increasingly preferred ‘Do It Yourself’ (DIY) path of financial management.
Generation Z are those born between 1996 and 2012, who are potentially having their first experience with financial freedom now. For them, swiping on a screen is intuitive and they are comfortable making all their decisions on a device.
“According to KPMG, by 2022, 820 million Indians will have smartphones and Statista estimates that by 2025, 970 million will have access to the internet. This is changing the way financial transactions are conducted and has led to financial firms adopting an increasingly digitised approach,” says Bajaj.
Not only a digitised approach, but the young Indians are looking for a complete transformation in all their experiences, and banking and finance is no exception.
“They want something intuitive and something that is truly invested in them. Something that is fast and made just for them. Something that makes them feel unique. And they want it now. I strongly believe that this rising demand has the potential to truly transform the way organisations provide financial services, ground up,” says Bajaj.
Founded in 2016, Slice has processed a transaction volume of Rs 1,100 crore to more than 260,000 youngsters since inception. Working directly with this generation for the last 5 years makes Bajaj aware of the kind of banking experience they need.
Based on his experience, Rajan Bajaj has shared his take on – decoding the financial needs of Generation Z:
1. One that is Simple and Intuitive
Jargons and complexities drive most youngsters away from taking their first step into financial independence. What this instagram-generation is looking for is an intuitive solution that understands the gaps in their financial knowledge and fills it in an uncomplicated way. From the design to the recommendation engine, financial solutions need a whole new look and approach to keep Gen Z engaged from the get go.
2. One that is Personalised
Young people demand the personal touch. They want a unique and customised financial experience, something that makes them feel valued and not like just another cog in the machine. But, a big differentiator is what the customisation is for. It’s not about golf courses and discounts on lavish hotels. Just like in relationships in our life, it’s the small things that matter here. Things that enhance their day-to-day life – like Sunday brunches, gym memberships, weekend shopping and uber rides.
3. One that is Transparent
Transparency is the key. The biggest hesitation we have all felt somewhere while making financial decisions is “What’s the catch”. And this generation does not tolerate that. They are willing to take risks and try new things provided they are given the kind of clarity they deserve. Which means gone are the days of ‘hidden charges’ or ‘read the fine print’. They want to know exactly what their credit limit is, interest rate, penalty charges and when the next payment is due. A company that can genuinely do this, wins.
4. One that rewards Loyalty
Historically, the primary focus of financial institutions has been acquiring customers. But we are now dealing with a generation that has all sorts of information on their fingertips. They are quick to compare and learn what they truly deserve. Your duty as a service provider is to understand your customers’ evolution and reward their loyalty. It could be through more customised interest rates or special offers. While that may come at some short term expense, it’s really important to think about long term benefits of having loyal customers.
5. One that understands new-age Customer service
While customer service has always been important, it takes a new meaning with this generation. They are used to live chats and instant resolution and it is imperative for financial organisations to meet that. In addition to this, they need to have excellent social media ‘care’ teams that are able to monitor, respond and escalate issues. Brands like Indigo airlines and Netflix have done an exemplary job at managing and resolving issues on social media platforms and it is going to be as important for financial companies vying for the attention of the same audience.
6. Finally, one that is Fun
This is the most obvious, yet very rare. This generation prioritises their happiness and wants new experiences with everything they do. In simple words, they want to feel good and experience an exciting level of engagement and satisfaction even while managing finances. Imagine building credit scores like a rewarding mobile game or getting offers at offline stores pokemon go style.