At nearly a quarter of the world’s population, millennials are the largest generation today and poised to inherit more wealth than any other in history. They are also the first generation of digital natives, and this has affected their expectations from banking and financial services.
In one survey, 50 percent of American millennials, as well as more than 40 percent of Gen Z respondents, found saving money very challenging. Despite needing help with managing their personal finances, research shows that millennials are not inclined to ask their banks for advice or, for that matter, even step into a branch. The independence of digital banking is clearly preferred as they seek transparency and control in their financial affairs.
In the past, it would have been impossible to meet such contradictory demands. But now, digital technology – and artificial intelligence, in particular – can empower millennials and Gen Z to make informed decisions so they can save, borrow, and invest better.
The last thing consumers need in today’s environment is high overdraft fees. So it is hardly surprising that some customers are leaving their traditional banks for next-gen, digital providers that have zero overdraft fees. While some banks may not be able to waive overdraft fees, they can recover lost ground by leveraging AI-powered analytical solutions to improve their understanding of customer cash flows and predict when an account is likely to be overdrawn. Based on insight into a customer’s spending pattern and scheduled expenses, banks can offer timely help in managing the account balance better to avoid overdraft charges.
