While financial institutions are wondering if they are doing enough to attract and keep Millennial-aged customers, a survey conducted with 2,500 16-18 year olds suggest that focus now needs to turn to the next generation, “Gen Z”. Some of the tactics used for Millennials will work with this up and coming generation such as a mobile first approach (of course), but there are some differences as well. These differences will require new approaches and services. The American Banker reported:
Overall, characteristics that define Gen Z is pragmatism, risk aversion, skepticism about traditional institutions like colleges and the heavy debt attached, and the use of YouTube over other Snapchat and other social media platforms.
Financial services institutions need to take a second look at their existing processes and products and overhaul them if they are not up to meeting the demands of this younger generation. These young consumers prefer prepaid cards and favor no-overdraft checking much more than other generations.
Other key recommendations: Use big data in a larger, more intensive way to customize interactions for Gen Z clients; use social media to test whether products or services are working; and market to the parents of this generation. Gen Zers look to their parents and families for financial advice more than social media, classes, seminars or online research.
Some of this is advice is simply reflective of the age and financial wherewithal of a younger generation and not really a seismic change in banking habits. Regardless of your view on this point, this will be a sizable generation to consider:
Gen Z is forecast to make up 32% of the estimated global population of 7.7 billion, and millennials are forecast to be 31.5%.
Overview by Sarah Grotta, Director Debit and Alternative Products Advisory Service at Mercator Advisory Group
