Under 25s to drive growth in retail banking
Service excellence must underpin the online preference of the emerging card user, say experts.
August 24, 2010 1:34 by Rasha Reslan
Manama, Kingdom of Bahrain August 2010: Growth in the retail banking sector lies in the hands of the e-enabled younger population, according to some of the region’s leading industry voices.
They suggest that the GCC’s burgeoning youth population are fast emerging as the new big spenders, stressing that payment channels must take into account their desire for a mobile lifestyle and love of chat.
A press statement from the Knowledge Group of the upcoming GCC Cards Summit said that this segment likes to shop, is brand conscious and has embraced remote communications as a lynchpin of lifestyle activity, including online purchasing. It said that today’s youth are already making noticeable waves in changing consumer spending behaviour and card usage. The Summit takes place in Bahrain in November.
One of the Summit’s supporters, Shankar Sharma, Chief Executive Officer, Arab Financial Services Company said that this techno-savvy, talk-happy under 25s presently account for more that 60 per cent of GCC population.
“Technology, youth and the onset of mobile-based payments are the three key drivers of the payment sector. Indeed, the technology explosion is feeding the appetite for constant connection, especially among younger consumers.
“Needless to say, the industry must be swift to respond, particularly to the trends in card usage. We cannot see any one solution as ‘it’. We have a responsibility to constantly redesign the payment portfolio as technology advances and customer behaviour shifts.“
Sharma stressed that change is the constant and traditional operators must embrace this if they want to be part of the growth in the payment market. AFS is on-board as the Summit’s Platinum Sponsor.
Meanwhile, Summit speaker Steve Davis, President, Author-it Software Corporation said that this new customer group has different listening and buying criteria than more mature consumers, including parents, teachers and other traditional influencers.
“Age-old word-of-mouth has really come into its own. The reality is technology has given us social media which has enabled frequent conversation, which in turn encourages shared information. This coupled with burgeoning new mobile communication solutions, such as apps, is demanding that marketers look again at the role of marketing communications tools, including advertising.
Davis said that shared testimonials are a huge factor in the buying decisions of youth. “Sharing is now a permanent fixture in the marketing mix, turning the acronym AIDA into AISDAS – awareness, interest, sharing, desire, action, sharing.”
He noted that the GCC’s 15 to 29 year olds account for 70 per cent of all Internet usage, with many spending more time using Internet media, such as Facebook and YouTube than watching TV.
Premal Patel, Executive Director, Veritas Events, the Summit organiser confirmed that mobile phone penetration in the in GCC is also high, nudging 200 per cent.
“One thing is certain, growth in cards payment is being driven by today’s youth. They will influence the future of the sector. Youth are the region’s emerging workforce and the industry’s new prime users of payment cards, contactless solutions and web payment channels. However, they want a different type of product and a different style of service than the traditional user.”
He agreed that youth segment provides a massive opportunity for the retail banking as a whole and that the industry must make a radical shift.
“The region’s banking sector must move fast, or be left behind as this young consumer ‘shops’ elsewhere for a payment solution.”
Sharma pointed out that the opportunity is a challenging one. “Everything is moving so fast that we too have to be fast to market with new products and services. The life cycle of a product in this emerging era could be months not years.
“The trick is how to balance thrivability on one hand and growth on the other,” he said.
Sharma cautioned customer insight and understanding is crucial and warned that traditional operators must find the courage to seek the advice of younger team members.
“No one has this experience. We are learning on the hoof and often without knowledge of emerging technologies, thus we must be open to the unknown and invite input from new channels. We must dismiss any urge of stubborn resistance.”
Davis agreed: “Innovation alone will not crack it. The industry must be flexible, nimble and constantly walk with the lifestyle of this young emerging market. It is highly likely that today’s youth will carry most of their lifestyle behaviours with them through life. They will become the ‘new norm’.”
Citing a report ‘The GCC in 2020: The Gulf and its People’, Patel said: “The GCC has one of the fastest-growing populations in the world, which by 2020 will increase by one-third, to 53 million people, with a high percentage under 25.
“The winners will be the one’s who move with this dynamic market tapping into their vocabulary and joining in their conversations,” he said.
Patel is talking ahead of the upcoming GCC Cards Summit, now in its second year.
He said that more than 200 regional and international players are expected to attend the two-day gathering in Bahrain in November. “The GCC Cards Summit provides a platform to discuss, debate and create a framework for market players to drive new success strategies in customer delivery & service, product innovation and bottom-line management,” he concluded.
The GCC Card Summit 2010 will be held at Mövenpick Hotel Bahrain from November 1-3, 2010.