Why digital natives are changing the face of customer delivery

Customer strategists at an AIIA event in Sydney from Westpac, Bank of Queensland and Right Angle Studios debate the concept of the digital native and how it's impacted the way products and services need to be delivered

Organisations looking to successfully deal with the next generation of digital-first customers must quickly embrace new technologies and be willing to innovate products and services in an agile fashion if they’re to retain competitive advantage.

This was the overarching theme of an AIIA Financial Services briefing in Sydney today, which pulled together customer strategists from Westpac, Bank of Queensland and consultancy group, Right Angle Studios, to discuss the concept of digitally native customers, and the challenges and opportunities this next generation presents to financial services institutions.

Andrew Murrell, the Bank of Queensland’s general manager of digital and direct channels, who was also on the team at the Commonwealth Bank that developed its successful ‘Kaching’ socially savvy mobile app, said the rapid adoption of disruptive technologies like smartphones and tablets prove it’s impossible to predict what’s coming next.

The digitally savvy users of these technologies and their expectations challenge the very development models banks have been predicated upon.

“A lot of us are still set up from an IT and business process perspective to deal with traditional world the way we’ve been dealing with it for the last 100 years,” Murrell claimed. “The reality is the scope of change is coming a lot faster and to survive, you’re going to have to make decisions and bets on what channel is right for you much faster than we do it at the moment.

“As organisations and businesses, we have to set ourselves up to deal better with whatever comes next in a much more nimble and agile fashion.”

The issue for most large organisations of course is that agility is incredibly difficult to achieve. Many banks, for example, maintain legacy IT systems that can’t easily be transformed or replaced, and operate in complicated processes and regulatory environments. Murrell agreed innovation at the core is expensive and takes a long time, and said more work on the edges of the organisation is one way of overcoming it.

“An innovation at the fringe, particularly with mobile and apps development, can be done much more nimbly and faster,” he said. “There’s no doubt though, banks have to be more like technology companies and move a lot quicker to fail fast and scale fast.

“The days of big enterprise IT is changing, but over time this innovation has to come together more. Overall, banks are doing it pretty well in pockets on the fringe, but with our core systems we still have a long way to go before we crack the needs of that digital native generation. We have got to move faster.”

Founder and strategy and insights director at Right Angle Studio, Barrie Barton, admitted Australians “don’t fail well” and attributed this to the old entrepreneurial system, where you would have idea to pitch and if it failed, it was all over. He claimed today’s businesses should be 'beta entrepreneurs' and innovate by iteration and adoption.

“That’s how we grow these days and in that context, you can have small failures,” he said. “Without taking these risks, we wouldn’t grow as businesses. You don’t need unequivocal success to move forward.”

Murrell said the ‘Kaching’ initiative at CommBank was launched swiftly because the bank developed the base offering quickly, then improved it along the way.

“You don’t have to go fully to market to know you have failed,” Westpac head of customer experience, Ian Muir, added. “We do a lot of low fidelity prototyping as a way of learning – or failing – and we do a lot of customer design work with research groups to improve products along the way.”

Tapping into digital natives

Barton also advised organisations to start a dialogue with emerging groups of digital natives who speak the language of technology fluently and have bigger expectations of what it can deliver. He described digital natives for the purpose of the panel as those born after 1984, who have never known the world without the Internet, although Muir also claimed the term could refer to early adopters of technology. Murrell suggested it was anyone who inherently goes to digital channels first to source information.

One of the biggest things digital natives represent is the shift in value away from an individual’s knowledge to their wider information network, Muir claimed. “The value is in how you access and share that to use it to your advantage,” he said.

In addition, smartphones and tablets have influenced and changed the way we interact with information and raised expectations of accessibility wherever and however we like. “The proliferation of these devices – we’re about to get Google Glass, smart watches and smart clothes as well – is making all of this digital interact more personal. Technology is literally becoming part of the fabric,” Muir said.

“This creates an ecosystem where I’m interacting and consuming information and that’s what we need to tap into.”

Barton also claimed the business community had “really underestimated” the impact the iPad has on information access and sharing.

“The iPad is to computers what the printing press was to verbal history; it’s a paradigm shift and huge leap,” he claimed. He also suggested predictions of gadgets becoming a prosthetic for humans are closer to being realised than many might think.

“You use your finger to see on an iPad; it’s core content is video, not the written word,” he said. “We are going to go down a rapid slide with technology. These things are going to be increasingly connected, intuitive and immersed in our physical world and physical selves.”

Defining the digital customer

Barton described the difference between traditional customers and newer digital users as “we type, they swipe”.

While this next generation of customer is often perceived as alien and demanding, he claimed most are still motivated by traits valued by humans for thousands of years, such as fostering real relationships, value and trust. “Technologies are a way we might experience those values but it’s not an ‘other-worldly’ problem we have to deal with,” Barton said.

There are some distinct differences however, that might prove valuable for organisations to tap into. Unlike Gen X, which grew up in the era of broadcasting information, emerging generations are about the power of the network, sharing, and equally what you get back, Muir said.

“Youth have higher expectations and believe that what we know about them, we should be sharing with them,” he said. “Previously, we haven’t seen the value in sharing that information.”

Gen X has historically been more social and anti-brand, whereas younger generations often see brands as content providers and are more commercially accepting.

Barton also claimed that while younger generations such as Gen Y, truly have it all in terms of information and products, they are more selective than their Gen X elders and better information curators. In addition, they’re good communicators, altruistic and generous in terms of community initiatives.

“We need to find a way to build them into our product development cycle, otherwise we’re all just going to be old-fashioned people trying to image what younger people want, when young people are actually willing to talk to us,” Barton told attendees. “They are a very pro-commerce generation.”

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