This is the first of two-blog series, taking a deep dive into the generations that banks are at risk of neglecting, such as over 55s. Our first instalment focuses on Gen Z, a group of young people that is fast becoming a serious audience.
Find out the various characteristics of this generation of digital natives, including the challenges that come with both acquisition and retention. In turn, we will discuss the various technologies that banks need to adopt to better target and appeal to this demographic.
What is Generation Z?
Born between 1980 and 1994, Millennials or Generation Y are an audience that banks have been trying to win over for years. Businesses had been scratching their heads to figure out how best to engage with these customers, who have grown up with the Internet.
Generation Z vs Millennials
However, the Millennial customer is no longer the problem child that requires solving. As the demographic gets older, they are equally as likely to become our next set of senior managers at high street banks.
As we familiarise ourselves with the behaviours of Millennials, and even older generations like Baby Boomers, who remain valuable groups of customers to appeal to today, how can we attract younger customers that we don’t know as well?
How to appeal to Gen Z?
Retail banks have always thrived on signing up customers young, so why is there new concern over how we appeal to the next group of new consumers, Generation Z? Follow our tips to stay in the know.
1. Get them when they’re young
Banks need to accept that Generation Z are young, born between 1995 and 2015; many are still in education. In order to reach this audience, banks can proactively teach personal finance to schools and colleges via pop-ups or mobile bank branches in the vicinity of the establishments.
It’s the age-old saying, ‘get them when they’re young’, and ensure they know who to go to for financial counselling when opening their first account.
2. Fuel their curiosity
Become synonymous with your commitment to offering free education about everything from budgeting for gap years to managing credit. Make learning fun and interactive, available online and in-branch, with after-hours food and drink to fuel their curiosity.
3. Nothing better than first-hand knowledge
With some banks only just getting started with their first Gen Z customers, they might not know where to start. Run stimulating programmes to include them in everything from app development to re-modelling bank branches.
Recruit Gen Z-ers onto your team, rather than young Millennials, to mentor your staff on messaging and help them to accept constructive criticism. There’s nothing better than first-hand knowledge of what works or doesn’t for this group.
4. Sharing is caring
Compared to previous generations, one thing to note is that socialisation is a common trend of this generation. According to the Center for Generational Kinetics, Gen Z enjoy sharing the amount of savings they’ve made with their friends.
Whilst adhering to financial confidentiality, show support towards helping your Gen Z customers share their financial experiences online or even within the branch.
5. Saving rather than spending
This generation enjoys being financially-savvy with their money – saving, rather than spending. As this is a big financial driver for them, it’s key that your bank invests in innovative savings products and services that enables them to automatically save money into their accounts for clothes or nights out.
6. Banks meet screenagers
Gen Z-ers are also tech-savvy and are likely to be the first group to ditch cash for debit and credit cards, due to the convenience of managing everything on their smart phone. Therefore, it’s essential to ensure your in-branch self-service machines are mobile optimised for authenticating and accessing services, such as updating digital wallets.
In order to evaluate how smooth and reliable your omnichannel strategy is, there needs to be a rigorous monitoring and measuring process in place to analyse digital experiences. Gen Z customers are also known as “screenagers” because they interact via screens most of the time and are hypersensitive to anything that looks out of place.
Their instinct will tell them to leave and move onto something else if the digital experience is below their expectations or interrupted.
7. An authentic experience
Don’t forget – Gen Z love social media and online video streaming so make the most out of YouTube and its how-to videos on financial matters, but also consider how you can leverage live videos to provide face to face financial advice.
Be prepared to offer these customers access to both a bank branch and a live person; train your staff to become experts in consulting. The trick is to responsibly collect and use data to anticipate the needs of the newest generation, who share a great amount of information about themselves.
Your employees are your most valuable assets, and the best spokespeople for the bank, as Gen Z need to identify with their advisors and regard the experience as authentic. Consider how in-branch systems can help boost your human capital.
What’s next after Generation Z?
So, get ready to face your next generation of customers!
There’s already Generation Alpha or Gen Glass in the pipeline – these are people born after 2010 and are exposed to the world of Internet of everything as soon as they step foot onto this world; where there’s no clear line between the online and offline worlds!
Banks and Generations – Part 2