As Gen Z matures and becomes a more significant player in the banking sector, financial institutions must consider how to earn and maintain their loyalty.
Read More: https://everly.eu/2023/03/07/why-digital-transformations-continue-to-fail-a-look-at-three-key-factors/
Gen Zers have exacting expectations and demand transparency and education about banking processes. While many start out with the banks their parents use, Gen Zers’ loyalty can quickly shift if their financial institution doesn’t meet their expectations.
“I think family has a lot to do with being able to understand the process of banking. There are some things that a FAQ webpage can’t really give you.”
— Gen Z consumer in study
Here are some key considerations for FinTechs hoping to win over Gen Z customers.
Gen Z Is Still Learning about Banking
Although Gen Zers are savvy when it comes to financial apps, they are still learning what it means to be a banking customer. They want to know more about the factors and decisions that affect their wealth, and many are wary of banks’ practices that contributed to the Great Recession.
“Chase is the bank my parents have always used. It is where they set up my savings account and first debit card when I was in high school or even younger.”
— Gen Z consumer in study
Banks have a unique opportunity to win Gen Z’s trust by providing education and guidance on wealth management. Developing self-guided experiences that educate in the near-term can help build trust in the longer term.
Gen Z’s Banking Journey Often Starts with Their Parents
Nearly every Gen Zer surveyed said they first joined the bank their parents used. However, Gen Z’s loyalty can be fleeting once they become financially independent. Banks must recognize Gen Z’s level of financial sophistication and focus on their overarching goal of wealth management.
Gen Z Lexicon:
Gen Z doesn’t distinguish between self service and bank-assisted service. To them it’s all ‘service.’ And they have little patience for ‘assistance’ that misses the mark.
This generation wants transparency into banking processes and expects justification for any holds. They crave financial education and want to know when they can access their money. Developing self-guided experiences that educate in the near-term builds trust in the longer term.
Service Is Crucial to Earning Gen Z’s Trust
Gen Z wants to interact with organizations the same way they do with their peers – anytime, anywhere, any channel. Same goes for customer service, especially in the financial sector.
How Gen Z Thinks:
Many Gen Z consumers create spreadsheets to help them compare banks.
Gen Z doesn’t distinguish between self-service and bank-assisted service, and they have little patience for assistance that misses the mark.
They will consider switching banks based on poor customer service experience.
“As long as the perks are good and as long as the customer service is good, the person has no reason to go anywhere else.”
— Gen Z consumer in study
Financial institutions should balance self and assisted service in a way that meets Gen Z’s unique preferences.
Banking Brand Awareness Equates to Trustworthiness
Well-known major banks with millions of other customers give Gen Zers peace of mind that their money is safe.
However, FinTechs must work to maintain this trust by meeting Gen Z’s expectations for transparency, education, and service.
Gen Z is Expectant Yet Patient:
This is a generation that is accustomed to services rolling out one feature at a time, the way Robinhood did. They don’t expect an app or bank to include everything all at once.
Banks have a unique opportunity to build loyalty by cultivating trust with Gen Z customers. By doing so, they will capture a generation that is poised to become banking’s key market.
