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Generation Z already outnumbers millennials and baby boomers and in a matter of years they’ll become the most financially powerful generation in our lifetimes. This generation represents a huge opportunity for community banks.
As this generation seeks a better understanding of financial services, community banks can take the lead by providing accessible and engaging financial literacy tools for these digital-natives.
According to research conducted by The Center for Generational Kinetics, Gen Z has been hardest hit by the pandemic. “Over half of Gen Z…believe the most positive thing to come out of this pandemic for them is an increased emphasis on saving money,” according to the survey.
More specifically, 59 percent of Gen Z believe they will begin saving more money because of the pandemic. An Experian survey of Gen Z corroborates these findings and also found strong demand for financial education by this segment:
Despite a thirst for financial basics, 64 percent of those polled in the Experian survey have never taken a financial education class.
What better way to build trust and introduce this demographic to relationship banking than by offering them the innovative, digital financial literacy tools they’re asking for?
Community bankers are already known for their financial literacy work with local schools. Many sponsor in-classroom digital learning, operate in-school bank branches, teach financial literacy courses, and even offer special checking and savings accounts for students. In fact, ICBA Chairman Bob Fisher said that financial literacy would continue to be a priority for him and the industry.
With so much work being done by fintechs in this area, the opportunity for partnerships is there. Take, for example, Zogo, one of this year’s ThinkTECH Accelerator participants. Backed by scientific research, the company offers a gamified version of financial education with bite-sized modules that users can complete in roughly two minutes. This solution can be white-labeled by community bankers.
ICBA’s Solution Directory offers additional automated savings and financial wellness solutions, including Plinqit, which can also be bank branded and pays users for engaging with content and advice from a bank, creating higher user engagement rates and natural cross-selling opportunities.
Complimentary financial literacy resources are also available through ICBA partners, such as Visa’s Practical Money Skills and The JumpStart Clearinghouse. Visa’s Practical Money Skills is an award-winning financial education program that includes money-management tools as well as tips on budgeting, savings, and life cycle events. Similarly, The JumpStart Clearinghouse offers online financial education resources from various sources.
Additional financial literacy resources are available on our website.
Gen Zers want to learn more about financial literacy, and they want it given to them the same way they consume other products and resources. Gen Z expects innovative, digital offerings, and community banks have the ability, relationships, technology and available resources to meet those needs head-on.
Charles E. Potts is ICBA Senior Vice President and Chief Innovation Officer.
