RESHAPING RETAIL FUND DISTRIBUTION

LOYALTY REBRANDED

One in three Millennials also says he is open to switching banks in the next 90 days and believes he won’t need a bank in the future 21 . This outlook is drastically changing the way financial service providers define loyalty. Security, simplicity, transparency, convenience, personalisation, product and price effectiveness have long been key factors for winning clients’trust (see figure 9). While these will still be important for Millennials, financial service providers will have to adapt their client retention tactics.

The biggest challenge for the next ten years will be how to manage the transition in the investor base between Baby Boomers and Millennials in an efficient manner. The winners are likely to be specialist firms that attract both market seg- ments and large scale asset managers/investment advisors by providing a full range of solutions. Moreover, the disappear- ance of the Baby Boomers and the entrance of non-financial disruptors (e.g. tech firms) could facilitate the end-game.

A NEW SET OF LOYALTY PRINCIPLES

FIGURE 10

Source: PwC Market Research Centre

SECURITY

SECURITY. The modern financial customer seeks a different kind of security compared to 20 years ago. At that time, the bank was seen as a vault while today customers are looking for cybersecurity policies to prevent electronic fraud.

SIMPLICITY

SIMPLICITY. Today’s customers expect simplicity in their interactions with financial institutions, as well as simple products and services supported by user-friendly web and mobile based applications.

PERSONALISATION

PERSONALISATION. Customers are increasingly looking for a high degree of personalisation and customisation of products and services. They expect solutions to be tailored, on request, to their own needs and habits through multiple channels.

CONVENIENCE

CONVENIENCE. The widening of the product offering due to technological advances and new entrants into the market is driving customers to be more focused on the concept of convenience in terms of cost, ease and speed.

TRANSPARENCY

TRANSPARENCY. Transparency and comparability are becoming the most important aspects when valuing financial products. Customers are more proactive when comparing the product offerings of different providers in order to find the most suitable match according to their needs.

EFFECTIVENESS

EFFECTIVENESS. Customers are value-driven and still demand strong product performance at a reasonable cost. They look for a high degree of efficiency in financial services, products and operations.

21 Viacom Media Networks, The Millennials Disruption Index, 2013

25