By Mehmet Sezgin, myGini As we see millennial spending power increase and await the impact of Generation Z, it is an absolute must for banks and credit unions to understand how these demographics interact with technology. Mehmet Sezgin, CEO and Founder of leading integrated payments and loyalty provider myGini, explains the ways banks and credit unions can deliver the services these consumers want and how to earn their loyalty.

Millennials are showing more discretion when it comes to spending habits and are looking to technology to help them manage their money. It might sound cliché to say that this is the ‘first digital generation’, but many just feel more comfortable interacting with a mobile app than walking into a shop, office or bank.

Generation Z – the cohort following millennials – is projected by some to make up 40 per cent of all North American consumers by 2020, and is naturally digital and more mobile-centric. These are the ones who have never known life without smartphones or Google!

Changing demographics, changing relationships

Millennials want to manage their finances and are looking to technology, in particular mobile technology, to help them better manage their cash flow and get the best deals and rewards possible. For this powerful group of spenders and for the upcoming Generation Z, banks and credit unions need to introduce mobile into their ecosystem through host card emulation (HCE) and QR-ready apps if they want to keep their interest – and their loyalty.

This means banks and credit unions whose skillset is money management, need to look to fintech partners help them deliver.

They can’t do it on their own, they need partners

While over the last few years traditional financial institutions saw fintech startups as rivals entering their arena – and some still do – more are starting to see collaboration as a way to offer a new type of user experience. They know their consumers want it, but – especially in the cases of small and mid-sized banks – they don’t have the experience or infrastructure to make it a reality.

Banks need to act now to make sure they stay on the right side of digital disruption in the industry. But equally, fintech partners need to ensure they are offering services that provide real business results – not just vanity metrics.

Making your card the card of choice – options and flexibility

Introducing features that enable cardholders to keep their cards in a digital wallet, monitor finances from an app or have spending control settings for outgoing payments are important to help customers feel they are able to better manage their finances in a convenient way.

Equally, banks and credit unions need to empower their cardholders with more options to help them discover new and better ways to spend their money and increase cardholder purchasing power.

Easy installments

There’s a simple way for banks and credit unions to take advantage of the rising trend of installments on card payments and enable cardholders to make purchases in a way that gives them greater control over their cash flow. With the right mobile technology, it is becoming a whole lot easier for card issuers to offer installments on purchases, as this can be done in real-time at the point of sale via push notifications.

Being able to easily control which card types or customers are eligible for installment options, which retailers, spending thresholds or interest rates and over which time periods would mean card issuing banks and credit unions can be a lot more dynamic and creative over how they make their installment offers.

Loyalty, rewards and points

It’s about building ongoing relationships with customers through digital services delivered on mobile. Rewards and loyalty programs are one of the best ways to achieve this – almost one in three American adults spend money on credit cards to get rewards. But we are not talking about collecting coupons anymore. For today’s shoppers it has to be a seamless digital experience. In a recent survey 76 percent said they want to redeem deals tied to their card when swiping at the point of sale.

But loyalty isn’t static – it is an outcome of proactive digital engagement. Being able to offer more dynamic rewards programs is going to be key to winning the battle for loyalty in banking – and mobile will be at the heart of this. Why? Because evergreen loyalty programs that do not change or update can quickly become the norm – and people will get bored of them.

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