Terry Duffy, Senior Vice President and General Manager, Self-Service Banking for NCR
Gen Z is predicted to become the largest – and wealthiest – generation in history. This demographic already accounts for 26% of the world’s population according to Earthweb, and they are expected to surpass Millennials’ buying power by 2031.From a global market perspective, this generation is the most influential since the Baby Boomers.
Gen Z is coming into a world in which the cost of living is rising, rents and home prices are skyrocketing and saving money is challenging, making financial stability all the more difficult to achieve. While managing their finances is complex given factors like student loan debt and inflation, this generation has demonstrated their dedication to being fiscally responsible; according to a 2021 survey from TransAmerica, they are starting to save much earlier than their parents and grandparents.
Even though Millennials and Gen Z face manyfinancial obstacles, they stand to have immense buying power. Given how impactful this groupalready is andis expected to become, it’s time for financial institutions (FIs)to better know and engage with them, learning how to best attract, serve and retain these critical customers.
Getting to Know Gen Z
While Gen Z is the first generation to grow up in a world dominated by highly sophisticated digital technology, human contact is still incredibly important to them.They expecta personal, human element to be tightlyintegrated into all aspects of the physical and digital banking experience.
According to a study from Cornerstone, around half of Gen Z and Millennials say it is important to be able to arrange an appointment with their FI’sbranch through their mobile apps. More than six in 10 think it’s important that a mobile banking app seamlessly reaches the contact center.Despite what many disruptors are touting, thehuman element should not be eliminated from digital journeys; it should complement technology instead.
Gen Z expects personalized financial products that cater to their desire for authentic and educational experiences. Given that they’ve seen the struggles of previous generations, they’re eager to become financially savvy and are strong adopters of financial literacy apps.This generation wants their FI to provide them with new options for managing their finances. FIshave a significant opportunity totake their relationship beyond transactional, to be more consultative.Such meaningful interactions boost engagement and loyalty.
In providing this journey personalization, big data plays a key role. FIsare capturing more data about their customers than ever before andsuch insight can help them identify macrotrends trends while also delivering more individually tailored financial solutions. Analyzing data such as credit profiles, account information and transaction histories enables FIs to more accurately offer relevant solutions and services catered to individuals.
Meeting Gen Z’s needs
To meet these expectations for digitally optimized, personalized and connected experiences, collaboration is a must. Gen Z livesin the digital age; they are the largest adopters of fintech services. FIsmust partner with flexible, moderntechnology providersto keep up and provide all customers, especially younger demographics, with the financial experiences they crave.
Automation is equally as critical in catering to Gen Z. The self-service channel delivers choice and flexibility, but it also allows high-skilled bankers on premise to forge relationships, advise and upsell. Evolving the branch model and approach, leveraging more automation to blend the physical and digital, allowsinstitutions to meet Gen Z where they are.
Lastly, Gen Z is becoming a generation of adventurous investors. Online trading platforms such as eToro make it easier than ever to dip their toes into trading and younger generations are embracing opportunities such as cryptocurrencies as another way to make money. FIs must solidify their cryptocurrency strategies and offer frictionless capabilities, or they risk Gen Z looking to other, alternative providers.
It’s critical that financial institutions do the research to better understand and serve Gen Z. This requires catering to their unique needs and preferences through delivering intuitive, modern and personalized experiences.Those that can effectively do so will be well positioned to build loyalty to attract and retain Gen Z, as they grow and expand their financial wealth and needs.