If traditional financial institutions haven’t yet felt the shift in consumer power, they will soon, and the shift is going to be fast, hard, and driven by Millennials.
Millennials make up 1/3 of the global population, and over 80 million of them live in the US. By 2017, U.S. Millennials are expected to spend $200 billion annually and $10 trillion in their lifetimes. With the tremendous amount of buying power, this group is set to make seismic shifts in existing industries. And, according to new research from Scratch, an in-house unit of Viacom, traditional financial institutions face the greatest risk in the Millennial movement:
- 53% of Millennials don’t think their bank offers anything different than other banks
- 1 in 3 are open to switching banks in the next 90 days
- 33% believe they won’t need a bank at all
- 73% would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank
- Almost 50% are counting on tech start-ups to overhaul the way banks work
Does this signify the decline of traditional financial institutions and pave the road for new alternative financial services? The answer remains to be seen, but the reality is regardless of traditional or new wave, the financial services industry needs to rethink how to engage, onboard and interact with a generation that expects to conduct transactions with any industry, anytime, and anywhere.
With the majority of Millennials wanting to perform transactions online and on mobile devices over traditional brick and mortar locations, financial enterprises must focus on services that leverage digital delivery capabilities. However, without the traditional safeguards of in-person transactions, the ability of a financial organization to authenticate the identity of a customer becomes the lynchpin in delivering uninterrupted, seamless consumer actions.
Identity authentication needs to match the real-time access of online activities, and the reality is traditional identity verifications methods just don’t cut it. If consumers can’t register for or log into their finical system via the web, mobile app, or phone, and if they can’t conduct both low- and high-risk transactions easily, the effort put into the architecture and development of online and mobile apps is irrelevant. Financial service organizations must look to solutions and technology that can help automate the entire online account onboarding, credential validation or payment process, and deliver a unified experience regardless of the end-users tool of choice.
Financial services organizations that will survive the Millennial index shift recognize the key to success is digital mastery in all areas of operation, especially in the consumer experience, and will recognize that identity and access management (IAM) has moved beyond internal walls and employees, and is extending out toward the consumer.
Leading financial organizations are adopting Credentials as a Service (CaaS) as a way to extend IAM to the consumer. A comprehensive CaaS solution will provide an organization:
- A quick seamless mechanism to collect, validate and store customer credentials
- A trusted 3rd party system operator to validate, hold, and present the credentials on behalf of consumers in specifically defined instances
- A mechanism to provide businesses with workflow management so they may easily set which credentials are required for each business purpose. This aspect also demands seamless integration into the business’ transactional flow.
Jumio is the leader in credential scanning and identity verification technology that is focused on reducing fraud and user friction. Our Netverify technology provides real-time ID verification through the consumers mobile, tablet or computer. The results: user-intuitive, easy-to-integrate, secure and streamlined mobile or web based validation that fulfills the ID verification and identity access management needs of financial service organizations.
By leveraging pre-learned behaviors of consumers through a QR-like scanning experience when submitting government documents, credentials or credit cards for processing and validation, Jumio not only eliminates the need for outdated, manual and time consuming operations, but also eliminates the need to have end-users learn new behaviors or pause transaction momentum.