Popular mythology suggests younger people are more tech savvy than older ones; digital natives and digital immigrants divided by technology. Teenagers would rather text than talk.
By implication, boomers are technophobes or at best neophytes. Future markets are more likely to be shaped by younger people than older ones. Many firms have set up Gen Y research, marketing and HR teams to help plan the future of their products and businesses. The size of this group already eclipses Baby Boomers and will soon represent half the workforce.
But is it really that black and white? The terms ‘Digital Native’ and ‘Digital Immigrants’ are already ten years old and technology has changed a lot since then. Technology is easier to use, more accessible and more embedded in almost everything we do. It’s harder to be a digital immigrant today. Boomers may prefer email and millennials texting, but they both can function in a real time information society.
The productivity gap has become slight not systemic.
Digital literacy adds a further dimension. Our participation in digital society varies significantly even within generations. Playing games and sharing photos as opposed to writing blogs and wikis suggests very different levels of digital literacy. The U.S. President is no millennial, but he has redefined politics through his sophisticated use of social networking and is reaching out to all of us.
Because of their broader use of technology, millennials may be wired differently than boomers which may make them better at multi-tasking. But that may make them less effective at deeper analysis and decision making. As we move to a more information rich, analytical society employees with deep analytical skills will be more in demand. But there may be fewer of them.
While millennials may be early adopters, Boomers are making a comeback. In May 2009 Microsoft and AARP sponsored dinners for 60 boomers in four cities – San Francisco, Phoenix, Chicago and New York – to explore what modern technology meant to them.[i]
Far from portraying a generation challenged by technology the boomers came across as ready to embrace it, but with their own unique perspective. They feared that their children were allowing technology to shape their lives rather than using it to help create the lives they want.[ii] Millennials may be early adopters of technology, but so too were boomers when they were young – after all this was the generation that produced Bill Gates and Steve Jobs. And that generation invented much of twenty first century technology – a revolutionary combination of flower and computing power.
Boomers have a unique perspective. Standing between their children – the millennials – and their parents – the Silent Generation – they can see both the dangers of over dependence on technology and the consequences of ignoring it. So they are more likely to have a more balanced view and use technology as a tool rather than an addiction.
Another Microsoft study that year reinforced this, focusing on financial services. While millennials were early adopters of technology, boomers were more pragmatic in their approach willing to use a portfolio of tools to achieve their objectives.[iii]
As technology has grown, its adoption spans the generations. Cell phones, including smartphones, are by far the most popular device among American adults of all ages. Again there were some differences. Younger users are more likely to use more functions than older ones. But that’s a long way from being a deep technological divide.
When it comes to social networking, Millennials may be the most connected generation in history. But, everyone uses social networks these days. Users 55 and older represent the fastest growing segment.
So what are the implications for banks?
Thanks to technology, there has been a big shift in power and influence from corporations and institutions to consumers and employees. We are less susceptible to traditional marketing campaigns and company messaging and more influenced by personal, shared experiences.
Thanks to the internet, we often know more about the corporations that service and employ us than they know about us. As a result, it is easier for consumers to compare one product with another and switch providers, and easier for employees to assess and discover new jobs and opportunities.
We live in a more and transparent, real-time and fluid society.
As a result, the competition for the best customers and employees is likely to accelerate. Banks in particular will have to make themselves more attractive destinations for both customers and staff.
In this context the diminishing technology divide between boomers and millennials is becoming less of an issue. Technology is embracing everyone. It is easier to use – more connected, inclusive, pervasive and embedded in everything we do. As a result customers both young and old will have more choices in how to engage with their banks. Similarly banks will have more opportunities to engage with customers.
For example, banking has traditionally been a face to face business. But ‘face to face’ means something different now. It may be a page on Facebook, a video call on Skype or an avatar on Xbox. Customers are more likely to engage with their banks through their smartphones, tablets, perhaps even from within their cars as automation embraces almost everything.
Thanks to the tremendous growth in TV content and the opportunity for interactive TV customers in the future may be just as likely to deal with their banks from their living room than from within the branch. Channels are likely to grow rather than shrink which increases the need for them to be integrated to encourage access to financial services from multiple sources and enable conversations in one channel to be continued in others.
Banks will have more information on customer needs. The growth of the internet and the plethora of connected devices increase the amount of digital information – Big Data – and opportunities to create targeted offers and campaigns. A new era of personalized eBanking will emerge.
In the past banks have had separate physical and digital strategies. This no longer makes sense. Banks will need to combine both physical and digital channels into a single integrated approach.
The bank of the future will be more analytical and less transactional, and more relationship focused. There is already a shift underway from building technology around products to building it around customer relationships and that will only accelerate.
To achieve this, banks and their branches will need new skills. A more sophisticated retail banking workforce will emerge with deeper relationship and advisory skills. This in turn will need new tools to manage it and new incentives to motivate and reward.
Millennials and Boomers – poles apart or peas in a pod? A fresh perspective is long overdue.
[i] “Boomers and Technology – An Extended Conversation” AARP and Microsoft, October 2009
[ii] “Boomers and Technology – An Extended Conversation” AARP and Microsoft, October 2009
[iii] “Earning Customer Trust in a Cynical Age” Microsoft, August 2009