Dubai: Millennials, who represent the highest proportion of the world’s population, are a demanding lot, and that has prompted wealth managers to redraw their business strategies.
Millennials (people born between 1982 and 2000) are generally chased by investment banks, media and other consumer firms. According to the US Census Bureau, there are 83.1 million millennials, representing a quarter of the country’s population and surpassing the number of Baby Boomers (ages 52 to 70) which stands at 75.4 million.
They like to embrace diversity, sustainability, globalisation, disruptive technology, new business models, and entrepreneurialism like no generation before them, according to Bank of America Merrill Lynch Research. Attributes like these are posing challenges and opportunities for traditional wealth managers.
“Millennials don’t want products to be sold to them in the traditional sense. They want to make purchases at their own convenience, and always remain connected. Our entire approach is not to push-sell to them but instead make products and services available and easily accessible through a frictionless on boarding process,” Suvo Sarkar, Senior Executive Vice President, Group Head — Retail Banking and Wealth Management at Emirates NBD told Gulf News on the sidelines of an event called Emerging Markets: Fighting Fit.
To meet the needs of millennials, Emirates NBD has launched a concept called Liv., which is UAE’s first digital bank.
The bank takes into consideration the lifestyle of millennials — their approach to work, fitness habits, hobbies and entertainment choices and created a proposition that enables them to keep track of their daily life and their finances in one app.
“In our experience, millennials view money more as a commodity to gain experiences, which is why our products integrate their lifestyle preferences with banking,” Sarkar said.
And the results are showing up. In the past one year, Liv. has received an overwhelmingly positive response from customers, and the bank acquires more customers through Liv. than the parent bank.
They prefer digital banking and more self-service when it comes to consuming services of the banks.
Emirates NBD is working on a hybrid wealth platform incorporating a robo-advisory that will help customers conduct their own risk analyses and choose products and portfolios.
“They will also be able to use the platform to connect with their Relationship Manager if they feel the need for further advice or assistance. Processes will be seamlessly aligned both at the front and back ends and made straight-through to provide a simple and quick experience,” Sarkar said.
- Suvo Sarkar | Senior Executive Vice President, Group Head — Retail Banking and Wealth Management at Emirates NBD
Habits
Millennials by habit are spenders than savers.
According to a recent study, about 53 per cent of millennials are likely to spend money on taxis and Uber compared to 29 per cent of generation Xers and 15 per cent of Baby Boomers. About 60 per cent of millennials buy coffee that costs more than $4 (Dh14.68) compared to 40 per cent from Gen X and 29 per cent of Baby Boomers. Therefore they need to be given a goal based savings plan.
“We are creating a mechanism to offer goal-based savings to millennials. For example, he or she can set a goal to travel to Japan for the Olympics two years from now, or to take private flying lessons. Goals are more about building short-term savings towards realising a particular experience or to enhance lifestyle, which is very different from previous generations that looked to save for retirement,” Sarkar said.
“They aspire to build a much more global portfolio as well as identify with causes and issues that resonate globally. When it comes to asset classes, they are more inclined towards investing in equity say over gold. They also look to investing in socially responsible companies or concerning issues that affect the community at large such as water conservation or education or health,” Sarkar said.
