When directors and executives at financial institutions think about generational differences, technology often serves as the biggest indicator for behavioral changes, and this stands true for Gen Z. As a generation fully immersed in online technology and banking since day one, they think about online experiences differently, and have higher and unique standards than their Millennial peers.
However, other trends reflect a response to their generation’s lived experiences, the lessons they’ve learned from older generations, and incremental building on the existing platforms they enter adulthood with. Consider these pieces when thinking about working with your Gen Z customers and retaining their attention.
An Organization With a Soul and a Face
More than any other generation, Gen Z wants the businesses the interact with to have an avid corporate social responsibility track record. This includes but isn’t limited to diversity, equity and inclusion, environmental and economic responsibility, and specific causes organizations partner with.
Gen Zers understand the impact their dollar has, and they want to make sure they’re supporting organizations they’re ethically aligned with. By being proactive about your organization’s stances and social advocacy, you can add the “why” to the “what” of your organization, attract young customers with a high lifetime value, and make a difference in the process.
New Financial Habits
Younger customers show a variety of new behaviors and spending habits. Namely:
- They are weary of credit. Gen Zers tend to look for alternatives to credit cards, such as pre-paid cards or alternative financing options, in order to avoid debt early in life. In particular, they have heard many stories about student debt from their Millennial peers, which has left an impression on them regarding debt as a whole.
- Personalization and community. Gen Z wants their products to reflect their identify, and to be tailored to their needs. Where Millennials saw value in innovation on a mass scale, Gen Z wants to take the next logical step to have smaller, tailored communities reflected in the products and services they purchase, including their relationship with their financial institution. Think of ways your organization can create personalized budgeting tools, or create a community of like-minded people who connect through their spending habits, investing decisions and interests.
Will to Change
More than past generations, Gen Zers are open to switching financial institutions for better offers and options, showing a flexibility and openness that is unprecedented. Obviously, this provides both an opportunity for acquisition and risk for attrition.
This willingness to change emphasizes the need to deliver on your brand’s promise and to find ways to deliver on customer satisfaction. Additionally, Gen Zers are more open to working with multiple financial institutions, so your organization will need to make a valid case for each new cross selling opportunity.