Gen Y, which makes up around 40% of the US population, is the most interesting group of consumers, because of their reliance on electronic gadgets, their literature, their banking services, their general outlook on life, and even their unique, contemporary, New Age drive to innovate. I just read how OCBC Bank in Singapore has opened FRANK, a new brick-and-motor bank for the Gen Y Singaporeans. The question is do Gen Y consumers even need a brick-and-mortar bank? No!
A Gen Y consumer will open a bank account in this fashion:
- Pick up a smart(er) phone.
- Touch the BANK app –> This will show all the banks in a given area.
- Select a bank.
- Enter the virtual branch.
- Give a virtual customer service officer a thumb impression for permission to access personal information. A pattern-recognition system will link to a secure citizen database which will authenticate information and allow the bank to access a copy of the customer’s personal information on demand. This will include credit checks and other due diligence checks like KYC.
- A virtual customer service officer interactively will help the consumer select bank accounts, a virtual credit card (e wallet) and, as a bonus, pre-approve the consumer for a line of credit and a mortgage valid for six months. All this will be available in the virtual bank account safe, which is an app on the consumer’s mobile phone.
- The bank will facilitate the funding of the account through transfers, deposits from an employer and other means.
- For ongoing transactions, the consumer will use an NFC-enabled mobile phone as a wallet.
If all can be done on a smart(er) phone, then why go to a branch. FRANK, do we need you?
I’m sorry JJ. I thought you wrote the article. My point was that the primary role of the FRANK locations is not transactional, but geared towards account opening. I’m guessing FRANK’s parents are thinking Gen-Y will come in, open an account, get their cool card and never step foot in the branch again (unless, perhaps, they need something else). FRANK strikes me as “store” more than a “branch.”
Everyone who says the bank branch is dead is only concentrating on the transactional side. For transactions, yes, all the “branch detractors” are correct: the branch is no longer a necessity. But to suggest “people (including Gen-Y) don’t need/use branches” does not jive with study after study saying that a significant portion of all demographic groups still like branches for consultative situations (per Joshua’s comment). See these two articles:
http://thefinancialbrand.com/13695/consumer-banking-preferences-in-canada-united-states/
http://thefinancialbrand.com/13301/datahead-100906/ (top data point)
It might help if you think of banks’ physical locations as evolving from transactions to interactions. Yes, in the future we will see fewer branches and a lot less transactional activity. But I’ve been hearing people say “branches are dead” for over 15 years now, and I’m still waiting to see any real signs of actual death. I expect we will continue to see fewer and fewer tellers in branches until one day when there are none, at which point I suspect most financial institutions will reduce their networks by 80% and keep a handful of locations as “regional sales and service centers.”
For the record, I am Gen-X and I haven’t stepped foot in a bank branch (for personal reasons) in… gosh, probably 5 years. I’m not sure I’ve been in a branch all but maybe 5 times in the last 10 years. So my observations are *not* a reflection of personal habits. Also, I don’t have any skin in this game, so I’m comfortable with my level of objectivity on the subject.