Mitch Dawes leads the Account Management team for Primax, a provider of payment processing services and value-added solutions for banks. He is responsible for furthering the company’s growth as a leader in the banking marketplace, as well as for new business generation.
Dawes has more than 25 years of payments and banking industry experience. Previously, at VANTIV/Worldpay, he managed some of its largest clients’ growth and retention. He was responsible for growing payments and teaching banking knowledge as an instructor. He began his career in payments at First Data Resources before joining TNB Card Services. It was acquired by Fifth/Third Processing Services, which became VANTIV. Dawes believes the preferences and behaviors of each generation – especially the younger groups – are extremely important for banks.
What are the emerging payment preferences and behaviors of the younger generations like Gen Z and Gen Y?
My 14-year-old son is a good example. He now has his first payment device – a phone. The digital payment app on his phone tells him his account balance, but at this point, he doesn’t need a lot of bells and whistles like FICO scores or a cancel payment function. He says that’s too much. Our research indicates 2 in 10 members of his generation prefer something simpler, like what you find with Apple’s iPhone. The simplified approach for the younger generations is what’s winning, and that’s why you’re seeing a lot of the non-bank fintechs driving into this space to capture new generations of customers.
How does this differ from the older generations?
The COVID-19 pandemic changed everything. Before, older generations almost refused to adopt digital payments. The pandemic rapidly accelerated digital payments adoption into actual table stakes as the older generations finally got onboard. Unfortunately, a lot of banks now find themselves in a digital quagmire because of their over-designed payments initiatives. They thought they had to add more bells and whistles to handle all types of functions digitally. But they created a digital mess. And when things went wrong with the customer experience, banks lost business. In some instances, the customer experience is not only lacking with younger generations but at the other end of the market with high-net-worth individuals. The relationship may be more complex because of their trading accounts and other components, but the experience can still be simplified. When you streamline the customer experience, you keep deposits and attract further transactions.
How can financial institutions meet the needs of each generation?
Financial institutions must change their forecasting and market growth initiatives from a two-dimensional view of how markets move to a three-dimensional view. Banks have to be able to fit the depth and breadth of consumer needs. This approach looks deeper into the customer journeys as well as the mined data for each group. As an example, there is a boom in wealth in younger age groups looking for different experiences. They are quite different from those building credit and stabilizing themselves in the workforce. Exaggerated card rewards, such as three-times-the points, is not the answer because it kills a bank’s bottom line. Customers demand a more personalized approach, and banks need a sustainable approach. The ‘ole’ shotgun way doesn’t work anymore. With all the data pieces aligned, you can correctly analyze the preferences and behaviors of each generation and go after the different niche markets.
How can banks ensure they’re meeting their generational audiences with the tools they want and the channels they frequent?
Many banks need to untangle the viny nests of their internal systems within the payments infrastructure. That means going with a best-in-breed provider of solutions to better align the front end of the integration with the back end. It’s the back end that’s the most powerful because it has all the data pieces behind it. With all the data aligned, you can correctly target the different niche generational markets. But if your data doesn’t match up correctly, it’s essentially garbage in, garbage out.
Do younger generations worry about fraud, or should they be more worried about it?
Fraud or the fear of becoming a victim of fraud is a top customer experience concern of card holders both young and old. According to our latest Primax Payments Pulse Study, about 8 in 10 bank customers say they decide how to pay for something based on the most secure option, up from 68% in 2023. But younger generations are particularly concerned about the safety of their online transactions. They need to feel comfortable with payments and banking because they are the generation that will soon be applying for car loans and mortgages. That’s the end game. Banks need to win the relationship with younger consumers coming into the market.
