Originally published in BISA Portfolio
In one of the most memorable Super Bowl ads ever created, Apple’s 1984-theme commercial for the Macintosh computer powerfully broke the threshold from the old guard to disruptive technology. The instantly iconic ad famously featured a female athlete smashing with a hammer the giant monitor carrying the oppressive message of the “Big Brother”-esque overseer. Forgetting allegations that Apple didn’t have the rights to 1984 and criticism that using the novel to sell widgets undermines and devalues the import of Orwell’s message, the ad was successful in communicating the arrival of a new era of technology designed for a new and different generation.
One of the many reasons the ad works so well on different levels is because it masterfully depicts the moment of dramatic change – something to which financial services and Fintech companies can relate. Were the ad to run today, it could easily be applied to a wide range of shifts from robos and digital disruption to the fundamental generational shift rattling the financial industry. But few areas of financial services are as mired in old, staid technology as the trust business where the technology and user interfaces soldier on with outdated systems and client experiences.
The great generational wealth transfer – especially in trusts – is under way and while Digital Client Experience for the mass affluent has begun to make the leap forward, the majority of trust company websites pretty much resemble Apple’s depiction of a dystopian world. Exacerbating the issue are the myriad differences between the technology habits and behaviors of the different generations. It’s well documented that millennials are a completely different animal with high expectations for technology. As PwC succinctly describes:
We are on the precipice of a $30-trillion transfer of wealth from baby boomers to Generation X and millennials. However, it’s going to be anything but business-as-usual over the next 30 years. The demographic inheriting this windfall loves technology and embraces change and disruption. Yet at the same time, “wealth management is one of the least tech-literate sectors of financial services.” This is a clear red flag for old-school service providers who are unable to evolve.
Ultimately, the financial companies who emerge as winners will need to understand consumer preferences and leverage new technologies. The changes are already happening, evidenced by the onset of “robo advisors” and, increasingly, with social aspects of investment management.
Research on millennials’ technology use at Trust Companies is scarce but studies on general digital banking habits offer insights into their behavior and preferences. For example, the majority of Millennials (61.2%) say they most prefer to do their banking with mobile apps, and 69.1% said they’d done just that during the previous week. In addition, 82.7% had used a mobile banking app during the past month, according to an MFour survey of 1,000 millennials. Mobile was the most preferred banking method across all racial and ethnic demarcations, age groupings and income brackets. The groups most likely to make mobile banking their first choice were Hispanics (71.1%) and Millennials with incomes of $75,000 or more (65.5%).
And it’s not just banking. Mobile platforms continue to drive development at most online brokers. Every brokerage in Barron’s annual survey reported growth ranging from 15% to 30% in trades placed on phones and tablets.
Adapting to the Digital Financial Life
Based on our work with clients and analysis of consumer trends, we define today as the era of the Digital Financial Life. This era needs to fulfill consumer expectations to take ownership of their financial lives completely through ubiquitous technology. These consumers exhibit characteristics specific to their era:
- Comfortable, confident understanding of living digitally, especially as it relates to an ability to view and manage finances.
- Autonomous in decision making. Willing to receive advice but preferring complete control of their financial life and decisions.
- Empowered (and desiring empowerment) by an ability to see their financial life holistically and clearly
The importance of this trend is no different for clients of trust products – digital is an imperative. For financial firms targeting millennials, it’s crucial to provide a premium Digital Client Experience – even (and especially) with trust products –when they are just one of a firm’s many product lines to be included in a unified digital experience.
 Chicago Tribune, 2/2/17