Article

What the 'Terminator' can teach us about boomer banking

Despite the spotlight on millennials, it's boomers who still hold the nation's wealth. Your level of engagement with them in all channels will determine whether it's 'Hasta la vista, baby,' or 'I'll be back.'

December 17, 2015

by Graham Currin, FTSI Inc.

Between "Mad Max: Fury Road," "Terminator: Genisys," and now the highly anticipated "Star Wars: The Force Awakens," it seems that everything old is new again. Hollywood is banking on this nostalgic appeal to older audiences for good reason: they have money.

"Baby boomers, because of their sheer numbers, are still the largest and arguably the most influential generation because of its strongest purchasing power with regard to various banking businesses," according to Gallup researchers Daniela Yu and Julie Ray.  

As 67-year-old Arnold Schwarzenegger says in the latest Terminator reboot, "I'm old, not obsolete." This sentiment rings true for many bank customers who feel taken for granted. In a banking landscape that is sometimes eerily giving way to a rise of the machines, Terminator can teach us a lot about the opportunity that boomers provide, what services they want, and which innovations will keep them from telling you, "Hasta la vista, baby."

Understand the opportunity

In the second Terminator movie, "Judgment Day," Schwarzenegger plays a good robot who can't understand the feelings of the humans he's protecting, which they understandably find pretty frustrating.

According to Gallup, many boomers can relate to this feeling as roughly 25 percent are dissatisfied with their financial institution and 12 percent are "actively disengaged." Active disengagement is defined as people who are, "emotionally detached, antagonized, and actively seeking out opportunities to tell others about their negative experiences."

Banks should take this as a sign that they should shore up the boomer accounts they do have while seizing the opportunity to reach out to these unsatisfied boomers at other financial institutions. There's a lot at stake here. "If banks can convert their actively disengaged customers to fully engaged customers, Gallup research shows it could open up a market of at least $82 billion in deposits and $443 billion in investable assets in the U.S.," according to Yu and Ray.

But why aren't these members engaged in the first place? The reason lies not with the machines, but with the people behind them.

"Most customer service providers don't devote extra time or attention to training agents how to effectively help older clients," according to Nicolas Dalleva, CEO of Specialty Answering Service, a call center provider. He reminds us that different communication tactics are needed for different demographics.

And that's just on the passive side where customers initiate transactions. You need to make sure you're actively reaching out to customers in meaningful ways and sending a monthly automated account statement email isn't going to cut it. "Banks must emotionally engage their boomer customers — an approach more likely to gain customers who will stick around, recommend the bank to their family and friends, and consolidate their high-value services there," says financial researcher Sean Williams. In other words, boomers want to experience a personal touch.

Provide digital services that work for boomers

After traveling through time, the Terminator's first goal is always to acquire contemporary clothing to blend in. The robot usually says something like: "I need your clothes," before brutally beating some punks or bikers and taking them. Similarly, boomers who've fought their way through a confusing bank website may feel like they've lost their shirt to a machine. "Banks are bad at this online stuff," says Brian Clark of consulting firm West Monroe Partners. "It's simple things like not having an easy way to get self-help instead of having to call someone and talk to solve a problem or get a question answered, or making people jump through hoops unnecessarily."

It's simply an untrue stereotype that boomers don't use technology. They are increasingly hungry for the ease of online and mobile services, but they need those services to be simple and intuitive. According to Jason Weinick, a senior analyst with Intuit Financial Services, "Boomers and seniors have shown an appetite for these services, and as we know, the more engaged a consumer is within a channel, the less likely they are to leave the financial institution."

Boomers know what they want from their banking services and, just like any other customer, they're willing to walk if you don't provide it. According to a study by Google, "48 percent [of customers] become frustrated and feel you do not value their business when a site does not work well on a mobile device." Furthermore, 16 percent of customers said they switched financial institutions due to poor mobile experience. The message is clear; you need to capitalize on this large segment of increasingly tech-savvy boomers by building a mobile platform that works for them unless you want to be terminated.

Tailor engagement to meet boomer needs

Throughout the Terminator franchise, when someone from the future comes back to save someone in the past, they don't have time to explain the danger. These future folk simply say, "Come with me if you want to live." If you aren't engaging your current baby boomer customers with the types of programs they want, then this is your "come with me if you want to live" moment.

One path to engagement is to launch highly visible financial wellbeing tutorials to show boomers your concern for them goes beyond just getting their money. Charles Schwab reports that a wide margin of boomers hasn't saved enough for retirement and that's a real stress point. According to Schwab's report, "60 percent of boomers have less than $100,000 saved for retirement, and 36 percent have less than $10,000."

If you can demonstrate your investment in your customers' future, they'll be more likely to invest in you. "About 7 in 10 fully engaged boomer customers say that their primary bank looks out for their financial wellbeing," says Williams. "Banks that successfully engage their baby boomer customers will win their hearts and more of their banking business."

The next step is to create a welcoming branch environment that goes beyond the perfunctory friendliness of just saying, "Hi. How are you?" boomers are the group most likely to visit your branches on a regular basis and they want that to mean something. "They expect you to know who they are," says Joe Sullivan, CEO and Founder of Market Insight. That means training your tellers to ask specific questions about a customer's day and making the effort to show interest in their life.

But all the good will you gain by personalizing your branch will be squandered if you don't fix problems that repeatedly frustrate your customers. That's why you need to create a super-responsive complaint resolution system. "When banks handle problems well, engagement levels soar," says Williams. "Four times as many actively disengaged boomers (28 percent) report having a problem with their bank in the last six months than those who are fully engaged (7 percent)." Plus if you can find ways to make resolving issues quicker, you'll gain even more praise.

Dave Lindorf of American Banker says, "Customers at Washington Trust can create a special identification code that allows the call center to positively identify them on the phone, so that a staffer can then confidently use the customer's password to get online and assist them in solving a problem." Imagine that — a financial institution that terminates problems for you. Now that's a future we can all hope for.

Graham Currin is a writer and researcher focusing on financial branch products and services at FTSI Inc. (www.ftsius.com).

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