As Generation Z (people born between 1997 and 2012) comes of age, their impact on the financial industry is becoming increasingly apparent.
This young generation, also known as the “digital natives,” has grown up in a world marked by instability and uncertainty, and their unique perspective is shaping the way they think and bank.
Below we’ll explore three key takeaways that traditional financial institutions can learn from Gen Z’s approach to banking.
Think Outside the Box
Gen Zers have been raised with smartphones and expect companies to keep up with their digital demands. According to a recent study by Morgan Stanley, 47% of 16- and 17-year-old smartphone users use mobile banking options.
This is a clear indication that mobile banking will be a crucial component of banking in the future. To meet the demands of Gen Z, traditional financial institutions should consider incorporating mobile options into their services.
One way that companies are doing this is through the rise of neobanks or FinTech firms that offer primarily mobile and online banking to consumers. While traditional brick-and-mortar banks may not be going away anytime soon, they should take note of the importance of mobile options in the future.
Social Media Matters
Gen Zers often take their financial cues from social media influencers, with over one-third of Gen Zers reporting that they get financial advice from TikTok, according to Barron’s.
While older generations may scoff at the idea of learning from a self-proclaimed financial guru on a social media platform, there is valuable insight that can be gained from understanding how Gen Zers use social media to inform their financial decisions.
Banks can utilize this resource to reach Gen Zers and middle-aged adults can learn a thing or two without having to fork over half their paycheck.
Values Are Trending
Gen Z is a generation that is deeply concerned about the state of the world and wants to use its purchasing power to make a difference. They often seek companies that align with their values and crave authenticity from the brands they do business with.
Once they find a company that meets their standards, they are extremely loyal. Banks can learn from this by being transparent about their values and practices, and by showing that they are socially responsible.
Generation Z is a unique and powerful generation that is shaping the way we think and bank. By understanding their perspective, traditional financial institutions can adapt to meet their needs and stay competitive in the future.
It’s time to stop underestimating the youngest generations and start paying attention to how and why they operate the way they do.