Banking on Generation Y:Implications for traditional Swedish retailbanks in the digital era
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
During recent years, digitalization has had an increasing impact in the society. It has gone frombeing an isolated part of an organization into something that can instead transform the business as awhole. Many businesses have experienced this change, and traditional retail banks are no exception.The digital climate has enabled new digital operators to enter the financial market and these havemanaged to claim market space. At the same time, a new, less loyal and more digital generation ofcustomers, i.e. Generation Y, will have an increasingly important role on the market. However, it iscurrently not well known how traditional Swedish retail banks should manage this, and whatimplications the behavior of Generation Y will have on the banking industry.The purpose of this study was to provide insights and implications for traditional Swedish retailbanks on how Generation Y’s banking behavior can affect their future business, in an increasinglydigital environment. The behavior of Generation Y and how banks address their needs, anddigitalization as a whole, were investigated separately. The findings were then compared in order toprovide insights into where gaps between the banks and Generation Y could be found. Toinvestigate Generation Y’s behavior, a qualitative questionnaire was distributed and thenquantitatively analyzed. Furthermore, in order to investigate how the traditional banks addressGeneration Y’s needs, qualitative interviews were conducted with representatives from the four largeSwedish retail banks. By comparing the findings, the purpose of the study could be addressed.Through comprehensive data collection, gaps could be identified. The most important gaps werefound in the areas of financial advisory and aggregation of services. Customers did not perceivethese areas as important when choosing a particular financial service provider, whereas the banksconsidered these as competitive advantages in relation to other competitors. These findings providevaluable insights for traditional retail banks in particular, and for the financial market as a whole,since they provide implications on the sustainability of the operators’ strategy. Moreover, this studycomplements the digital customer behavior literature connected to virtual distribution channels andthe retail banking industry as a whole. One main finding was that Generation Y’s, otherwise trendseeking behavior is limited in the banking industry, and instead, habituation and security concernsare far more important. Therefore the findings suggest that Generation Y’s behavior might be moreconservative in the banking industry than in general.
Place, publisher, year, edition, pages
2016. , 125 p.
Digitalization, Retail Banking, Generation Y, Customer Behavior, The Gap-model
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-189565OAI: oai:DiVA.org:kth-189565DiVA: diva2:946897