BE IN THE MOMENT AND PART OF AN
ECOSYSTEM TO CAPTURE ‘NOMAD’
CUSTOMERS –WITH ASSETS WORTH UP
TO AU$2 TRILLION, A SIZABLE GROWTH
OPPORTUNITY FOR AUSTRALIAN BANKS
Australia has a new type
of banking consumer –
the Nomad – and they are
worth up to AU$2 trillion.1
The Nomad is savvy,
adventurous, and keen to
shop around. Traditional
models will not work for
them, but they will reward
those banks that are as
nimble as they are.
Representing 30 percent of a sample
of Australian bank customers surveyed
by Accenture, Nomads display
conspicuously different banking
characteristics from their compatriots.
and crucially, they are currently
the least well-served, satisfied and
understood. In contrast, quality seekers
and hunters – the other 2 segments
identified – are already well served
by banks. Considering how Australian
banks have evolved their services
through simplification and digitisation,
we expect our institutions to continue
to meet the needs of these two
segments. Quality seeker and hunters
are more likely to remain loyal to their
current primary banking institution.
Banks that can figure out the
Nomads have the chance to build
a significant growth engine.
CHARACTERISTICS: OTHER
AUSTRALIAN SEGMENTS
Six in ten would consider setting up
an account with a supermarket or
a retailer. Most startlingly, even in
Australia, more than three-quarters
(77%) would be willing to open an
account with Facebook, Google or
other online service providers if it were
on offer. Moreover, “traditional” loyalty
to a single brand is not a prominent
attribute for Nomads.
Hunters
They have a significantly greater
preference for digital channels
than the remaining 70 percent of
the Australian banking population.
They are also more demanding of
convenience, insisting on being able
to access services wherever they are,
whenever they need them. They are
more adventurous too – interested
in experimentation and in helping to
shape new products and services.
• See trust as vital
NOMADS: OLDER
AND WEALTHIER
THAN YOU THINK
But this is precisely why this
group represents one of the best
opportunities banks have to grow
market share. Their propensity to
explore and embrace change means
they can be prized from competitors,
Contrary to assumptions, these
digitally savvy consumers are not
exclusively millennials. In the survey,
43 percent of Nomads fall into the
22–34 age bracket, but more are older:
37 percent are between 35 and 50,
2
• Prefer traditional providers
• Want banks to match tech
providers’ digitally driven
service levels
• Need the human touch
• Open to new services
Quality seekers
• Want to stay with banks
• Interested in Innovation
• Open to automation
• Enhanced experience
and another 12 percent are over 50.
Many have accumulated some wealth,
which makes the Nomads a sizable
opportunity for Australian banks: their
total liquid assets are estimated at up
to AU$2 trillion.
Nomads are, of course, difficult to hold
on to. They prioritise convenience and
immediacy over strong relationships,
and they will use their digital skills
to move on to other providers if they
are not satisfied. To have a chance
of staying relevant to their Nomadic
customers, banks must be equally
digitally savvy in understanding and
serving this group.
Nomads are like social butterflies: they
move from one offer to another and
are attracted to whatever offer is most
relevant to them at a given point in
time. They will choose banks that curate
the right service options for them and
– crucially – provide the opportunity to
shape products and services.
A cellphone network whose name is an
old Scottish word for “mutual giving”,
the U.K.’s giffgaff, is an example of a
business model built entirely around
this last nomadic principle. The giffgaff
manifesto states: “We believe in
listening to our members. Involving
them. Being run by them.”2 Not only
do customers provide tech support
for other customers on the online
community, but they can also visit
giffgaff Labs to suggest new features
and ways to improve the business.
These are then voted on by other
customers, and the company provides
them with regular updates on whether
their idea is being developed.3
NOMADS VALUE
CONVENIENCE AND
EXPERIMENTATION
Australian banks are starting
with a strong digital foundation.
According to technology consulting
firm Forrester, Australian (and New
Zealand) banks are the most digitally
innovative in the world.4 This has led
Australian consumers to be among
the world’s fastest adopters of mobile
banking5. With over half of Nomads
in the Accenture survey (56 percent)
expecting to use smartphone apps
for making contactless payments
and being able to transact that way,
Australian banks already have the
right basics to serve them.
But Nomads expect more. Almost
as many (54 percent) want to use
personal budget-monitoring tools,
and 44 percent are interested in
getting instant face-to-face banking
advice via their smartphones.
Figure 1. What nomads want
“Nomad” survey respondents
interested in...
52%
receiving information about
services exactly when they
need them
50%
receiving specific
location-based offers
56%
using mobile apps for making
contactless payments
54%
using personal monthly budget
monitoring tools
53%
P2P payment services
55%
tools to transfer money abroad
instantly and at low-cost
45%
tools providing direct access
to digital money (e.g. Bitcoin)
Nomads’ adventurousness is not
limited to their devices. For example,
most (eight in ten) are willing to
experiment with machine-generated
banking advice. Although Westpac,
National Australia Bank (NAB),
Commonwealth Bank of Australia, ANZ
and some smaller banks are in various
stages of trialling “bots” that are
powered by artificial intelligence (AI),
most are still at the proof of concept
stage or positioned mainly to answer
customer-service enquiries. Nomads
expect digital advice which will
come to resemble, in their cognitive
sophistication, the advice offered by
investment management firms’ “roboadvisors” to their retail customers.
Some Nomads desire services that
go beyond what banks are currently
willing to support. Nearly half of those
in the survey (45 percent) would like to
have tools giving them direct access to
digital forms of money, such as Bitcoin.
Having until recently resisted Bitcoin’s
encroachment into domestic currency
markets, Australian banks are only
gingerly testing the waters with Bitcoin’s
underlying Blockchain technology.6
The research also shows that over
half of Nomads (53 percent) are
interested in peer-to-peer (P2P)
payment services. Although these
could exclude banks from the value
chain, some of Australia’s banks recent
investments in P2P start-ups could
lead to bank inclusive P2P services.7
SEIZE THE MOMENT,
WIN THE NOMAD
This points to the gradual development
of bank capabilities. However,
capturing significant share in this
market segment means embracing
the realities of nomadic banking.
Judging by the survey, for example,
Nomads are highly transactional
customers, and they want information
and services “in the moment” –
exactly when they need them and
wherever they happen to be. This
kind of service is already offered
to them by non-financial service
providers, from retailers that provide
targeted offers the second that needs
arise, to location-driven restaurant
recommendations. These services
have created liquid expectations8
that are spilling over to banking.
This goes far beyond checking account
balances. It may mean getting quotes
on mortgage deals while they’re out
house-hunting. It may be warnings
about potential overdrafts or fraudulent
activity while they’re in stores
shopping. It may be receiving offers to
their smartphones from bank-affiliated
vendors when they’re in the vicinity
of their stores. Or it may even be
obtaining help whilst away from home.
The importance of the moment means
banks will discover that some nomadic
realities are harsh. If Nomads can’t
get the information they need at that
moment (e.g. the quotes that meet their
price points, or a real-time service that
meets their quality expectations) they
will shop around, using their digital
skills to quickly find other providers.
Figure 2. Nomads are not wedded
to banking with traditional players
“Nomad” survey respondents who
would consider opening a bank
account with...
60%
A supermarket or retailer
77%
An online service provider,
such as Amazon or Google
Source: Accenture
LET THEM ROAM: FREE
MOVEMENT ACROSS
SERVICES, CHANNELS
AND ECOSYSTEMS
Should banks strive to keep their
Nomads in their branded channels? In
our view- no. Nomads should be offered
the choice of channels, the choice
of responsive service and a personal
touch. Nomads do want to speak to a
bank rep on some occasions – even if
that is through a smartphone or another
online device – and they want to be
able to walk into a bank branch.
They are multi-channel customers
but relationship banking, however,
is not high on their priority list.
Only a minority (29 percent) say
that relationship- and advice-driven
services are important to them.
Trying to stop Nomads exploring and
switching will lead to frustrations.
Instead of trying to lock them in, banks
should support Nomads’ transactional
behaviour. Given that Nomads are
willing to maintain multiple provider
relationships to suit their needs, this
support is likely to mean letting them
transact across a wide ecosystem of
partners and paradoxically reducing the
barriers to switching. Give customers
the freedom to roam; they will see
a hassle-free brand they respect,
recommend and engage with even if
some of their needs are not met through
proprietary products and services.
3
All customers should feel like they are
at the centre of product and service
development and delivery, but this
goes deeper for Nomads. Banks need
to serve them even if it isn’t with their
own product; and make accessing new
services easy, even if it means sharing
part of their patronage.
Delighting Nomads means giving them
seamless access to innovative new
options, wherever they come from.
This relies increasingly on the right
ecosystem partners and integration
with third party services.
This freedom runs counter to
traditional industry wisdom but
Nomads will be frustrated by anything
less, and soon make their escape
to a more progressive competitor.
Apart from ensuring your organisation
is always that more progressive
competitor, the new wisdom is to
create the right affiliate links, crosssells, sub-brands and platforms to knit
together an ecosystem offering that
catches spilled revenue (and valuable
data, at the very least) while also
drawing in Nomads from competitors.
CO-CREATE: NOMADS
WILL SHOW YOU HOW
TO WIN
Our research provides a clear picture of
what Nomads want in general, but banks
need to engage with this group directly
– and continuously – in order to lead the
market in specific product and service
features. Fortunately, many Nomads
value co-creation and want to help their
banks to innovate and develop better
products and services. Nearly four in
ten (38 percent), for example, would
like their bank to create social media
groups that allow them to give their
input into new products and services.
The major Australian banks have
recognised this desire to co-create,
and have set up innovation labs or hubs
– National Australia Bank’s NAB Labs,
for example – in which bank employees,
customers and independent startups share ideas for new products and
services. The question remains how
to scale the engagement with Nomads
beyond lab environment.
4
One area that would be ripe for
such collaboration is new forms of
communication and interaction:
39 percent of Nomads express the
desire for their banks to introduce
new ways of communicating, such
as via wearable devices. And judging
by their interest, mentioned above, in
receiving computer-generated advice,
AI and machine learning are also likely
to be fruitful areas of bank-customer
collaboration. Put simply, Nomads
are looking for more innovation and
excellence in digital services compared
to other consumers (see Figure 3).
Co-creation initiatives not only help
to practically deliver this, they also
demonstrate a bank’s commitment
to listening and innovating.
A TAILORED APPROACH
TO A SHARE OF A
$2 TRILLION SEGMENT
The Nomad will not be attracted to
or retained by traditional banking
models or marketing, so Australian
banks will need to adapt.
Channels need to fully support
personalised “in the moment”
interactions that serve Nomads’
immediate needs. Banks should
surprise these customers with new and
unexpected ways to access products,
services and advice; involve them in cocreating, evaluating and experimenting
with products and services; put greater
power in their hands with self-service
technologies; and build an ecosystem
that gives them what they want, when
and how they want it.
Of course, banks will have to pull this
off without alienating more traditional
customers – who are still in the
majority. The majority are less likely to
switch to a disruptive new competitor,
but they are also a group less likely to
grow. Nomads, on the other hand, are
not yet getting what they want and
will surge to banks that provide it first.
With an estimated value approaching
$2trillion, that makes this group both
a compelling growth opportunity and
a fascinating challenge for Australia’s
banks in the years ahead.
Figure 3. Nomads want more sophisticated digital services
I would like my bank to blend physical
branches and digital services, allowing
me to interact with them in the way that
best suits me, and which gives me a
seamless experience
54%
45%
I would like the ability to switch between
online and telephone channels when I am
making a purchase/accessing a service,
without it slowing down the process
51%
34%
I would like to have instant access to
face-to-face advice from my bank or
insurer via my mobile device
I would like my bank or insurer to
introduce new ways of communicating
with me, such as via wearable devices
or virtual reality headsets
Nomads
Source: Accenture
Other Consumers
44%
23%
39%
11%
References
1 Accenture analysis, based on self-reported
liquid, investable assets (excluding property).
2https://www.giffgaff.com/manifesto
3https://labs.giffgaff.com/how
4Australia and New Zealand banks among
the most digitally innovative in the world:
Forrester. CIO New Zealand. 13 June 2016.
5 See, for example, Adobe Digital Index:
State of Banking Report. 2 May 2016.
6 Several banks closed their Bitcoin accounts
in late 2015; in early 2016, they were cleared
by the Australian Competition and Consumer
Commission of colluding in these actions.
7 http://www.afr.com/business/banking-andfinance/westpac-invests-in-sme-online-loanbroker-valiant-finance-20160613-gphpe4
8http://www.economistgroup.com/
marketingunbound/consumers/
accenture-liquid-expectations/
9NAB Labs prepare bank for the future.
The Weekend Australian. 2 May 2016.
Contacts
Alex Trott
[email protected]
Pascal Gautheron
[email protected]
Methodology
Accenture surveyed 32,715 respondents across
18 markets including Australia, Benelux, Brazil,
Canada, Chile, China (Hong Kong), France, Germany,
Indonesia, Ireland, Italy, Japan, Nordics (Finland,
Norway, Sweden), Singapore, Spain, Thailand, the
United Kingdom and the United States. Respondents
were consumers of banking, insurance and investment
advice services; they were required to have a bank
account and an insurance policy and were asked if
they used an independent financial advisor, wealth
manager or asset manager (investment advisory
responses totalled 9,987.) Respondents covered
multiple generations and income levels. The fieldwork
for the survey was conducted during May and June,
2016. Australian respondents numbered 2,011, of
which 613 (30%) were characterized as Nomads by
cluster-analysis (i.e. analysis across multiple variables).
About Accenture
Accenture is a leading global professional services
company, providing a broad range of services and
solutions in strategy, consulting, digital, technology
and operations. Combining unmatched experience
and specialized skills across more than 40 industries
and all business functions – underpinned by the
world’s largest delivery network – Accenture works
at the intersection of business and technology
to help clients improve their performance and
create sustainable value for their stakeholders.
With more than 394,000 people serving clients
in more than 120 countries, Accenture drives
innovation to improve the way the world works
and lives. Visit us at www.accenture.com.
Aleks Green
[email protected]
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