What Does Gen Z Want from Their Banks?

Gen Z

It’s safe to say that in banking, as in other industries, companies were slow to solve the mystery of the new (well, old-new) generation of consumers, Millennials. Now, in the waning heyday of Millennial dominance, companies are faced with a new group surging onto the scene — Gen Z or “zoomers.”

Currently, companies are still completely tailoring their marketing strategies to Millenials, if they’re catering to young people at all. But just as Gen X has wildly different requirements and expectations, so do the Zoomers about to replace Millennials as the primary youth category.

Banks missed the boat on Millennials a bit, and that led to the successful rise of digital-first challenger banks that figured out what makes them tick first. This needn’t be the case for the zoomers. If banks act quick, they can craft promotions and products that appeal directly to Gen Z. But what exactly do they want from their banks?

1. A Robust, Omnichannel Experience

There is a stereotype about zoomers and how important a digital experience is to them. And it’s not without merit — Gen Z spends way more time on their mobile devices than even their Millennial predecessors. Some reports suggest a majority of zoomers spend over five hours a day on their phones. And while creating a mobile, digital-driven experience should be a cornerstone of your banks strategy, it can’t be the be-all-end-all.

First, addressing digital, zoomers expect complete interactivity from their online interactions. Restarting applications across different channels and products is a foreign concept to them. They want a one-stop-shop, and need to feel their banking experience is holistic across channels. This is what they’re getting from all the big tech companies, and could be swayed away from a traditional financial institution if a big tech company can do it better.

Gen Z is also looking for human interactions to create a more intimate experience. As part of an omnichannel strategy, banks need to allow for video chat customer service and branch employees trained in the language and requirements of this next generation of banking customers. Allowing them the freedom to choose which stream they take to get to the same end will be a major advantage over digital-exclusive offerings from Big Tech.

2. Extremely Competitive, Bundled Offerings

Like Millennials, Generation Z isn’t going to be content with their financial institution just because there’s a branch nearby or it’s the one their parents were with. They will be shopping around for the best fees and rates and decide which institution to bank with accordingly. The same promotions that got you your Boomer customers won’t work on the Zoomers.

It only requires taking a quick look at a digital challenger bank’s promotions to know that this means. No fees for chequing products, high interest on savings accounts and cash-or-point rewarding credit cards are the de facto desires of zoomers — and they want them seamlessly bundled so they don’t need to pursue multiple applications or take several trips to the local branch.

And these product offerings and bundles can’t just be competitive, they also need to be tailored. Gen Z is used to customized digital experiences provided by everything from Netflix to Amazon. They don’t want a shotgun promotion aimed generally, they want something they feel is targeted at them based on their spending habits, lifestyle and interests. Is your bank prepared to offer this level of granularity?

3. Seamless, Effective Technology

One thing that zoomers expect more than any other generation is ubiquitous, functional tech. This extends to their banking. Outages and service delays that may have been a mere nuisance for Millennials is a migraine for Gen Z. They have little patience for technological quirks and poor UX — and this will be reflected in their patronage of financial institutions.

So what’s the state of your bank’s core? A lot of major institutions are still on legacy technology programmed with COBOL, used in the 80s and earlier. These systems are prone to error, difficult to update and almost impossible to replace, at least without major disruptions. And if you’re trying to court the next generation of banking clients, you need to find our ways to avoid this at all costs.

But if you want to bring innovation and new offerings to your bank, you can’t just remain stagnant. That’s where partnerships with FinTechs come into play, and Zafin is no stranger to that. Technology like ours can sit on top of core systems and offer new, contemporary capabilities without breaking anything and causing those headache causing outages that might drive away zoomers.

Conclusion

Don’t miss the jump on catering to zoomers. While many institutions are still figuring out Millennials, you can get an advantage by employing Gen Z focused strategies right now. And when they enter the market in a massive wave, you’ll be well positioned to capture their interest — and business.

Want to get started modernizing the banking experience you offer? Get in touch with Zafin today!