With modern technology, millennials and Generation Z can be excited about investment banking

Millennials, the generation born between the early 1980s and the late 1990s and the next generation Z, are called digital natives. Because they grew up with technology.

Messaging and social media services are not only an important part of their lives in the private sphere. Modern IT solutions also play a crucial role in working life. Children up to the age of 34 see the advantages above all in the time saved at work and in everyday life. New technologies make life easier and speed up operations. This also applies to banking applications. And: Only 23 percent of millennials are truly satisfied with the services of their home bank.

Confidence in banks is declining

Digitization is an integral part of the daily life of this age group. In order to reach them as customers, banks must rethink their strategies and digitize their operations. The Corona pandemic has also increased the need for digital operations in the financial sector. But many banks were not ready for this.

And it costs them their customers’ trust: According to Accenture’s Global Banking Consumer Study 2020, less than a quarter of Germans today trust their own bank. In 2018, that percentage was still 30%. However, at the same time, more than half of those surveyed (57 percent) believe that advice from their bank has advantages for them. It is clear that financial institutions are still considered as competent advisors when it comes to investment. However, the account holder still has to visit his bank in person for this. This has been a huge challenge during the pandemic, but it has worked in many places. Now financial institutions must adapt to this new world.

According to a study by the Capital Group, millennials are increasingly turning to smartphones for financial matters. 72 percent use a financial institution’s mobile app for this purpose, and 66 percent use it several times a week. Purchases and bill payments are also increasingly being made using mobile phones. It is therefore not surprising that the so-called Generation Y is also open to video telephony. According to Accenture, nearly every second person (46 percent) could imagine this possibility, even if their branch opened again. 35% prefer a video call to a personal conversation. Before Corona, only 15 percent of bank customers worldwide used a videophone.

Time is valuable

In addition to digital communication channels such as video telephony, digital and automated processing also saves time and ensures uncomplicated processing. This is where the digital identity matching procedure comes in. Younger customers especially expect to be able to open their online account within a few minutes. The two-week setup process that involves printing an order, delivering a package at the post office, and ID verification is no longer up to date. In addition, this spending of time can also lead to loss of interest using professional banking solutions. With video identity verification, time is no longer an issue.

The video identification process takes only a few minutes: the user keeps his ID card in the video chat and reads his name and ID number. Artificial intelligence does the rest. It analyzes multiple layers of vital data and hidden security features and delivers a robustly reliable result.

The next step is digital identity in the “digital wallet”, where instead of having to identify themselves anew in each case, citizens will be able to use their identity wallet in the future to identify and confirm their identity. The European Union Commission has launched a regulatory proposal for eIDAS 2.0. The EU eID digital identity wallet must be able to be used by citizens across the EU region. In this digital ID, users can also store driver’s licenses, tickets, admissions for local public transport, concerts, marriage or birth certificates to facilitate any visit to the authorities

Benefits of digital investment banking

  • Full digital setup: Traditional setup takes several days to a week for new clients, as applications are mailed and printed and applicants must go through a post-identification process. Through digital processes such as electronic signature, customers can digitally sign applications and quickly and easily verify their identity online using video or automatic identification processes and a digital identity wallet.
  • Same day account opening: Within a few minutes, the user’s identity is verified and the contract can be signed online. Instead of mailing the application to a customer who prints it at home and mails it back, a bank advisor can process it in one day.
  • Acquisition of new target groups: Financial institutions are accommodating millennials and the next generation, Generation Z, with digital setup and banking via an app or even video telephony with a bank advisor. This allows them to gain the trust of young people and maintain their confidence against new banks and online brokers.
  • Digitization: Which bank they work for is less important to representatives of the tech-savvy generation. Instead, their focus is on ensuring that the financial services and processes offered are simple, secure, and digital. This ID wallet not only simplifies the process for everyone on board, but also minimizes the effort involved in all future identifications. Therefore, many traditional financial institutions need to position themselves better regarding this digital transformation. As the big tech companies show, analyzing customer data in particular offers a lot of potential to understand your customers and stay competitive.

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