By Tina Giorgio
With the eldest members of Gen Z clocking in at age 24, they represent a market ripe for targeting with banking services. But what they are looking for differs from what Millennials and Gen X required of community banks at the same age.
Gen Z makes up the most tech-savvy generation we have seen. They are digital natives—never having known a world without online services or smart devices and are comfortable conducting financial matters via their phones. In fact, 80% of Gen Z report having a money transfer app, and over one-third of their transactions happen on a mobile device.
Gen Z are expected to have more buying power than Millennials and Baby Boomers combined within a decade, but a lack of financial experience amidst a prevalence of self-service options could impede their progress. Overall, 53% believe they can improve their financial literacy but are unsure how, and another 61% say they would like their bank to offer money management advice.
When you combine this thirst for knowledge with the fact that 80% of Gen Z trusts their bank with their data, the opportunity for community banks to help them reach their financial goals is clear. Understanding this audience and how to connect with them will be imperative to responding to their needs.
As you look to compete for next-generation customers, here are four tips to consider:
- Meet them where they are with the financial knowledge they need. We’ve already established that this generation is hungry for financial education, but how and where that information is delivered matters. According to a September 2021 survey, 39% of Gen Zers aged 18-24 learn about personal finance from TikTok, YouTube or other social media outlets—far more than the 23% that learn from parents or family. So, in addition to offering their parents’ advice, having a presence on these social channels will help elevate and showcase your financial expertise. In addition, solutions like Zogo, an ICBA ThinkTECH Accelerator alumni, can help you in taking financial literacy efforts even further.
- Create a seamless digital experience. With this generation, employing a brick-and-mortar approach to your digital strategy won’t fly—not when 68% believe websites should “talk” to each other. Your mobile app should focus on their digital journey and delivering a superior user experience. Thankfully, as new opportunities with APIs emerge, the digital experience you want to offer may be as simple as identifying the right partner.
- Structure your payments strategy to attract their business. Ninety-eight percent of Gen Z reports using mobile payments to transact so it’s likely that new offerings, from faster payments to cryptocurrency, may come into play as you look to woo this generation. Nearly two-thirds of Gen Z (62%) are “significantly more” likely to trust their financial institutions to handle their crypto investments than non-bank cryptocurrency providers. As a leading authority on payments, your bank can provide solutions that combine the safety and security they need with the efficiency they have come to expect—all in line with your payments strategy. (For more on how to develop your payments strategy, reviewICBA Bancard’s Payments Strategy Assessment Tools.)
- Showcase local support and investments in the community as a point of distinction. Gen Z is twice as likely as any other generation to say that the purpose of business is to serve communities and society. By remaining true to your community-based, service-first mission, you embody the perfect financial partner for this next generation of customers. Now, let’s make sure they know it.
Two thirds or 66% of Gen Zers say once they find a brand they like, they stick with them. By providing financial advice, appealing to their digital nature, and leveraging what makes community banking special—personalized service and community ties—you can grow market share while strengthening relationships with current and prospective customers.
Tina Giorgio is ICBA Bancard President and CEO.