In the traditional analog banking world, huge investments were made in physical bank branches, canvasing many geographies, staffed with cadres of tellers and advisors engaged in high-touch transactions. But times have changed, and technology and digital channels are now top of mind for retail banks.
Banks are now focused on a seamless end-to-end digitized experience for their customers, a trend that’s likely compounded by fear that tech companies will invade their territory. While many banking professionals rank digital channels and mobile technology as top priorities, it’s important for the banking sector to maintain their focus on the greenest areas of opportunity. And in that respect, consumers with robust assets and deep pockets should be top of mind.
This group, coined the mass affluent, live in households with $250,000 to $1,000,000 in liquid assets. They also control about 26% of total U.S. wealth. The important thing with this group is that its digital banking needs vary by generation. While the Baby Boomers and Silent Generation make up 77%, younger generations are growing in importance and financial prowess. So in light of the differences, a one-size-fits-all approach to digital in retail banking is not a viable way to encourage success.
The launch of new online and mobile wallet services will likely drive increased use of technology for banking and retail transactions among mass affluent Millennials. Comparatively, mass affluent Boomers may not be the earliest adopters of these types of services, but their high smartphone ownership could drive future use.