You may think that Generation Z is too young to be thinking about financial matters. However, this is not true. As per a recent survey by Raddon Research Insights, 33 percent of Generation Z individuals already have a bank account. What’s more, their habits and preferences differ significantly from millennials. Currently, this demographic accounts for 35% of the world population and banks have started paying attention to what this generation wants from banking institutions.
Here is how banks are changing for Generation Z:
1. They Prefer Physical Banking
Generation Z is often described as digital natives. They love technology and thrive on connectivity. Consequently, one may assume that this generation is likely to embrace online banking. On the contrary, Gen-Z’ers prefer visiting physical branches. What’s more, their affinity for physical banking is higher than in millennials and baby boomers.
However, there is one defining factor that banks must consider when serving Gen-Z customers: Technology is still a primary driver when it comes to establishing a relationship with them. Besides focusing on online banking services, banks also need to provide a digital experience to Gen-Z customers at their branches. This is also why this demographic prefers to use major banks such as Bank of America or Wells Fargo. They can provide these customers with the technology and ease of use they desire from banks.
2. They Dislike Debt
This is another way that banks are changing for Generation Z. A majority of Generation Y is still paying off its student loans. Unlike millennials, generation Z is not comfortable with taking on debt. These individuals grew up during the 2008 global financial crisis and the events of 9/11. Consequently, they exercise great care in how they spend their money. They are also likely to question the value of a college education because of how expensive it is.
If banks want to sell their loan-based products to these customers, they must reconsider their terms and conditions and facilitate them accordingly.
3. They Desire Instant Help
As it turns out, generation Z customers are incredibly impatient. They place great value into how they use their time and prefer companies that provide them with fast solutions. This can be detrimental to banks that rely on excessive paperwork and slow account opening processes. To address this problem, many banking institutions are introducing instant help services. These services provide 24-hour online and offline assistance to customers.
Gen-Z customers also enjoy using contactless cards and paying through mobile phones. These can allow them to make a purchase by scanning their phone at the payment register.
4. They Prefer to Save Money
Gen-Z is not oblivious to the concept of retirement, nor are they frivolous about spending money. A whopping 52 percent of GenZers are saving for retirement. An additional 28 percent also plans to work after retirement.
Banks must address this preference and offer their Gen-Z customers with retirement plans that cater to their needs.
In a Nutshell
There are several ways in which banks are changing for Generation Z. From providing digitalized services to developing sound retirement plans, there are several factors that banking institutions must consider to serve this generation and build a long-term relationship with them.