Gen Z includes people born between 1997 and 2012. While some of this generation is still in middle school, its oldest members are starting their adult lives and foraying into the world of banking. Gen Z is expected to open four million bank accounts per year for the next several years.
This presents a powerful opportunity for banks, but how do you appeal to this generation? Here’s what you need to consider.
Mobile banking options
Gen Z has significantly higher rates of mobile banking usage than other generations. According to a recent Insider Intelligence marketing report, nearly two-thirds of Gen Z respondents said they had recently used an online banking app. In contrast, fewer than half of Millennials, 40% of Gen X, and just over a quarter of Baby Boomers had the same response.
However, Gen Z doesn’t just want to handle banking essentials online. This young generation also prefers to open accounts online. While mobile banking capabilities may be an afterthought for customers from other generations, it’s top of mind for Gen Z.
Over half of this generation say that mobile banking is the number one point they consider when choosing a bank. In contrast, fewer than half of respondents from other generations ranked this as their top consideration.
To appeal to this generation, financial institutions need to make the leap to digital. They must offer intuitive banking apps with a lot of features.
Although it ranked 12 points behind mobile banking capabilities, low fees were second on the list of items Gen Z considers when it looks for a bank. This generation is well aware of the profits that banks reel in through fees, and they don’t want to support this punitive revenue stream.
They also tend to consider rates of return on savings accounts. They want their money to work for them. The companies that are reaching this generation the most successfully are highlighting this element.
Help with financial preparedness
Although they are tech savvy, Gen Z’ers don’t feel confident about their financial knowledge. They want to work with financial institutions that can help them learn about investing, saving, and working toward financial goals. Banking apps that integrate educational features can be ideal for meeting this objective. This generation loves apps that feel like a game.
The evolving borrowing needs of this generation present a lot of revenue potential, and banks that are going to be the most successful with this generation will use their apps to nurture customer relationships. For example, helping a young banking customer prepare for home ownership increases the possibility that they will want to apply for a home loan through your financial institution.
Personalized banking experiences
With traditional customers, personalization happens in the branch. It occurs when personal bankers recommend financial products, loan officers customize offerings, and tellers greet customers by name. A lot of Gen Z can still appreciate these elements, but more often than not, this generation doesn’t want to walk into a physical branch.
Instead, they want personalization through their bank app. They want credit cards or loan options based on their unique preferences. They want investment tips tailored to their knowledge levels. This generation has spent their lives online, interacting with ads and social feeds that have been customized based on their search history and engagement patterns. They expect this from their bank.
Trustworthy, transparent brands
Gen Z is skeptical. They’ve grown up in the era of “fake news” and they understand the importance of vetting their sources. This doesn’t just apply to media consumption. It also applies to the brands they engage with. This generation wants to trust their banks.
They will look for trustworthiness signals while choosing a bank, but they will also consider trust factors during their relationship with the bank. In the past, people chose a bank once and stayed with it for the rest of their lives. This is no longer the case — people of all generations will jump ship for better offers. This is especially true for the youngest generation of banking customers.
To maintain trust, you need transparent practices and policies that are easy to understand. You also need to commit to anti-fraud measures that keep your customers safe, without compromising the customer experience.
Frictionless customer experience
This is the on-demand generation. They grew up with two-day delivery or even one-hour drone delivery in certain cases. These customers don’t want to deal with legitimate transactions being shut down due to a suspicion of fraud. They don’t want to jump through a lot of hoops to verify legitimate transactions. Of course, on the flip side, they also don’t want to become the victims of fraud.
To strike the right balance, you need anti-fraud solutions that don’t have a lot of false positives. You need tools that get to know your customers’ behavior so that they can detect fraud effectively without compromising the customer experience. This is critical for all generations, but it’s especially critical if you want to appeal to Gen Z.
At SQN Banking Systems, we pride ourselves on providing fraud solutions that are in line with changes in the banking industry. We want to help you protect all of your customers, while also appealing to the newest cohort of banking customers.
Want to strengthen your defenses? Then, contact us today. We’ll start with a no-cost fraud process review. Then, we’ll help you customize a fraud solution that works for the unique needs of your banking customers.