By Grace Ge, Senior Principal, Publicis Sapient
Just as important as engaging current customers, is inspiring new ones. That’s the attitude Monzo has been taking by announcing it’s expanding its offerings by opening children’s accounts.
From this summer, 6 to 16-year-olds can utilise the digital challenger bank’s range of services, set saving goals and organise money into ‘pots’. Accompanied by brightly coloured Monzo cards, this new development aims to give children their first taste of saving and budgeting, with in-app guidance on money topics. And this can only be a good thing.
Legacy banks should take note of these approaches to connect with younger consumers and adapt services to meet the evolving expectations of Gen Alpha. As the second digitally native generation, these youngsters have grown up surrounded by screens and know their way around a smartphone. Meeting these customers where they’re spending a lot of their time can engage them from an early age and build lasting customer loyalty. But it’s not just about being there: it’s about developing ways to engage with them that genuinely resonate with their needs and preferences.
Learning the financial lingo
Despite an influx of information over the last twenty years, there are still issues with financial education. With so many resources, perhaps the prospect is overwhelming. Whatever the reason, millions of children aren’t being taught about money at home or school. The Money and Pensions service found that just 47% of children received a meaningful financial education in 2023.
This is where financial providers need to step up and lead the way. After all, if people can understand their services, they’re more likely to use them. And if they can build this understanding from an earlier age, it will continue to grow as the financial terminology develops. This is where Monzo’s in-app guidance is genius, but it isn’t the first to suggest this kind of idea.
Publicis Sapient works with banks like Lloyds Banking Group, assisting in the digital transformation of its services across the fast-evolving landscape of modern banking. Core modernisation lays the foundation for deep customer insights and innovative, hyper-personalised offerings.
Core modernisation is the process of updating a bank’s tech and data infrastructure, giving greater insights into customer behaviour by creating a strong data foundation. These data insights transform a bank’s digital capabilities and can give them a competitive advantage.
The challenge legacy banks face when implementing the kinds of services Monzo is offering is that they lack a strong data core, with cluttered data gathering, which can prevent them from launching hyper-personalised products and services. To successfully challenge digital-native rivals, they need to understand holistically the customer experience and how to build a business and journey process that’s easy to manage, highly automated and can be continuously improved.
AI’s on the money
Understanding customers’ needs, regardless of their age, starts with building a strong tech and data foundation. With this foundation, banks can then start thinking about embracing modern capabilities such as GenAI, AI, and Machine Learning, creating innovative solutions to better serve their customers, better support their colleagues and enhance operational processes.
These solid foundations serve as a key differentiator and competitive advantage for the banks to become truly customer-centric and innovative in its offerings, go to market and adapt quickly, and ultimately become successful in an ever-evolving digital landscape. To do this, banks need to build modern composable architecture with data as the core, and make conscious and strategic investment into Gen AI.
This GenAI strategy needs to be linked to the overall bank strategy. Then, the bank needs to build a clear understanding of the GenAI use cases, both for internal colleague use and customer facing, and where value comes from, with a proven method to systematically prioritise these use cases. Banks need to set up the governance approach and operating model to enable GenAI. Every part of the business, from business to IT, to operations, risks and compliance, needs to have a clear understanding of its role in GenAI and continue to evolve the thinking.
Building these capabilities will require the bank to take an agile mindset and approach, with incremental releases and continuous improvement. Decision velocity is a crucial component in successful agile delivery. This means empowering people close to delivery to make decisions, with clear delegation of authority and escalation criteria.
The result is a more efficient and capable system across the business, operations and IT, and more personalised in the way the bank engages with its customers. It means the bank can create offers and services that are tailored to customers’ needs and behaviours,
communicate in a way that resonates with the customers, and provide recommendations that are tailored to them.
Banking on success
Banks who understand the benefits of core modernisation and implement it end-to-end, from strategy to delivery, are in a better position to start experimenting with GenAI and implementing use cases. To successfully adopt GenAI at enterprise level, banks need to be able to be programmatic at building the foundational blocks to enable it. These could include, e.g., clear articulation of value and costs, setting up the organisational structure, governance approach, route-to-live process, and risk management to rapidly bring ideas on GenAI use cases to live. After that, the bank needs to continue monitoring the performance of the solution, collecting feedback to further enhance the solution, continue to scale the use case, and then rapidly replicate the success to other GenAI use cases.
An example of a GenAI enabled hyper-personalisation and communication tool could be a chatbot to answer customer queries. This can be embedded in the customer onboarding journey, the servicing journey, or as part of the financial education solution. They can help further the ideas Monzo is experimenting with its children’s account and its in-app financial advice, translating product offerings and financial terminology in a way that speaks to younger customers and their parents.
By helping this group better understand what they are buying into, make their journeys and experience seamless and reflect their own preferences, nurture these customers along the way and throughout their customer lifecycles, banks can build long-term relationships with their customers starting from an early age and onwards. A core modernisation approach redefines a bank’s ability of what’s possible and can bring to life continuous innovation that benefits its customers such as Gen Alpha and beyond.
