A 20-something walks into a bank and waits in line to deposit his or her first paycheck.
If that sounds like the beginning of a joke, it is at least close to it.
Nowadays, young people rely less on bank tellers and more on the comfort of their smartphones and tablets for transactions.
In response to the generational shift, even the oldest banks want to diversify their services for younger customers. Savings Bank of Danbury, the city”™s oldest operating business, is on the forefront of revamping its software platforms and developing new technology applications to reach the most skeptical age group of banking customers in the nation.
“If you think about millennials and Gen Y”™ers, they grew up with the financial crisis,” said Kathleen Romagnano, president of Savings Bank of Danbury. “They”™re skeptical about banks and they”™re looking for resources they can trust.”
To better understand the attitudes of its Generation Y and millennial customers, Savings Bank of Danbury and the University of Connecticut are on board with a pilot program initiated by Fiserv Inc., a Wisconsin-based global provider of financial services technology, to design banking apps for smartphones.
“As we look to the younger generation, we realize they function differently from my old traditional customer who sits at a desk at a branch,” Romagnano said. “They prefer instant messaging or texting instead of getting on the phone or coming into a branch.”
The first iteration of the program, which was the research phase, started last fall. This spring, a group of four UConn students finished working on the design phase of the banking application through UConn”™s business accelerator program, which associate director Michel Rakotomavo helped advise.
“We had to research the behavior of the millenials and Gen Y potential clients and their attitudes toward the banks,” Rakotomavo said. “We also had to research regulations on the industry. Once we had solid base on some of the findings, the next phase was for the students to generate ideas for applications. Part of the question is, ”˜What sort of apps would be attractive to help banks attract millennials?”™ Then we ran financial analyses and estimated the dollar benefits and estimated return on the investments for each app.”
The Savings Bank of Danbury and UConn developed a hand-and-glove relationship where the bank became the educator helping students fully understand its industry, while the students threw out ideas and targeted questions at the bank”™s “professors.” After providing feedback, the bank got to see UConn”™s app ideas in a final presentation.
“Some ideas for the app allow financial institutions to create new checking and savings accounts on remote devices,” said Chris Van Der Stad, chief technology officer of the Fiserv Open Solutions division. “Customers can go to a remote location and open an account at that location if an employee of a financial institution has the app open on an iPad device. They can set up a table at a college campus or a county fair and accept new accounts at that location for the day.”
Most of the apps Fiserv plans to develop for its banking clients range from free to a few thousand dollars, Van Der Stad said. There is an incentive to buying these apps, he added.
“It”™s cheaper to get it through your app store than developing one on your own,” Van Der Stad said. “The model we use will reduce the cost of these capabilities.”
Savings Bank of Danbury, which relies on Fiserv for its core banking system, receives funding from this tech company to run its banking application program, Romagnano said.
UConn will start up the Fiserv-sponsored banking application program again in the fall.
“We”™ve been fortunate enough to have businesses that extend their partnerships over many years,” Rakotomavo said. “We anticipate more funding in the fall. Typically, a team of four UConn students with different backgrounds from different campuses has served us well.”
Savings Bank of Danbury said the collaboration on this project has been an educational opportunity to teach the younger generation about the evolution of the banking industry.
“When you participate in the program you get as much out of it as you give,” Romagnano said. “My staff gets to work directly with students. We”™re delighted to work with UConn and attract bright, young people into the business industry and keep the talent local.”
