Appealing to Gen Z in the platform era

It was only a generation or two ago that customers had a very close relationship with their banking manager. They enjoyed coming to the branch to catch up with employees while getting help with even the smallest problems, and considered the amount of ATM locations as a deciding factor when choosing a bank. Unfortunately, the same can’t be said for the members of Generation Z, who likely can’t name a single employee at their bank and only visit their branch if they have a poor digital experience.

Generation Z are digital natives, and they’re the first generation to have grown up in the platform era surrounded by companies like Apple and Uber. These companies provide an instant and seamless digital experiences which have simplified every aspect of their daily lives – including their financial lives. While many members of Gen Z are kids or teens, the oldest are in their mid 20s, and they’re starting to make major life decisions and investments. Considering the fact that they carry over $143 billion in purchasing power, now is the time to market to them and show why you should be their primary financial institution. However, this won’t be done through traditional banking methods that appealed to previous generations.

Take a look as we explore 5 ways you can target and win over members of Generation Z.

How to appeal to Generation Z

1. Meet them where they are – online
Unlike the generations before them, Gen Z grew up with the internet, computers, and smartphones, with little or no memory of the world before this technology. Digital technology has always been available to them, making life quick and easy. Whether it’s downloading a new song, ordering a meal, or communicating with their friends, they’ve always been able to do it instantly online or with a mobile app. Being so tech-savvy has given them high expectations when it comes to how they interact with companies, and this includes their financial institution. They ultimately demand that their bank or credit union have innovative digital capabilities in order for them to consider you their primary banking choice. In fact, studies show that 60% of Gen Z and Millennials would consider switching banks for better digital capabilities.

According to BAI Banking Outlook research, one of Gen Z’s top priority is having a banking app and online interaction that provides faster payments and quicker transfers, with automated savings and investment tools being ranked second.

2. Provide personalized, tailored experiences

It goes without saying that the platform era has raised expectations, not only for a seamless and frictionless experience, but also for a more personalized one. Tailored interactions can greatly improve engagement, loyalty, and trust – all of which are essential in turning prospects into long-term customers and members. Many industries have recognized the importance of personalization and embraced it, but unfortunately financial institutions have yet to do so.

Banks and credit unions still tend to focus on business goals without attempting to achieve the “people-first” initiatives and efforts that Gen Z expects. Studies show that almost 75% of banking customers feel that product offers are more valuable when they’re relevant to their financial circumstances. Rather than bombarding everyone with the same promotion for your latest credit card, you should use data to offer products and services that provide solutions to improve their financial wellbeing.

3. Become a trusted source for financial guidance

You may be surprised to hear that, unlike older generations, Generation Z finds financial education to be very important as they start their independent financial lives. According to data from Experian, which surveyed recent high school graduates who had never taken a personal finance class, 43% said they want to learn to save, 38% want to learn to manage their expenses, and 36% want a class that teaches them how to file their taxes.

But this education can’t be provided in mundane ways using traditional banking jargon. Gen Z considers online tutorials, on-demand content, and convenient, digital access to employees to be extremely valuable.

4. Showcase your involvement in the community

Gen Z consumers aren’t as easily impressed with your products and services as they are with your involvement in improving the community. Many members of Gen Z are aspiring activists, and they value supporting brands and banking institutions that focus on sustainability and racial and ethnic diversity. In fact, research shows they are twice as likely as any other generation to care more about issues of equality and supporting businesses whose values align with theirs. Their feelings towards a brand will be positively influenced by an organization’s association with a social cause or community involvement. This can play a big role in choosing what companies they choose to support or do business with, so don’t be shy in showcasing your involvement in the community, as well as non-profits you support, and be sure to integrate your efforts across your institution.

5. Combine the human + digital experience

60-70 years ago, branches were created for convenience, but it’s now clear that today’s customers no longer see brick and mortar locations as the most efficient way to interact with employees. However, there are some problems and services in which a member or customer will need to come in. A recent Cornerstone report showed that 37% of respondents thought going into a branch would be a faster and easier way to get their question answered by a representative.

To help remove the stigma of branches being burdensome, it’s essential to embed digital banking with the person-to-person interactions. This can be done with video interactions, access to reps via digital channels, and giving employees access to data to decrease redundant questioning when assisting those who come in. Even the most digital-savvy generation still wants guidance from a human.

Generation Z may be young, but they’re reshaping banking. As they move away from mid-market financial institutions and head towards online-only banks, credit unions, and fintechs, it’s time for traditional financial institutions to re-imagine what banking can and should be: built around their customers and members.

How Backbase can help

Many financial institutions struggle with legacy systems and core banking software that’s slow, complex, and expensive to maintain and upgrade – making it difficult to keep up with digital-native competitors. Backbase gives banks and credit unions a way to elevate the entire customer and member experience with personalized digital services and trusted, personal on-demand advice. We offer a vast amount of capabilities to help you serve and support your customers and members when it matters most.