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Are Financial Services Companies Prepared for the Gen Z Battleground?

Adam Picker | Director, Commercial Markets

June 9, 2021

There is an up-and-coming generation of individuals wielding tremendous spending power who have concrete needs from financial services providers. Is your organization ready to attract, serve, and retain them?

Gen Z comprises individuals born after 1996, or up to age 25 (Sorry, Millennials, you’re going out of style!). While Gen Z may not always be thought of as a prime target for marketing initiatives, consider that they are approaching new life stages in which financials will play a huge role - things like buying a car, leasing an apartment, early savings, and paying off student loans. Winning them over while they’re young could directly lend to your brand’s longevity.

What do we know about Gen Z?

They are truly mobile native.

  1. 75% say they would switch from their primary financial services provider for a better mobile app 
  2. 37% prefer opening a deposit account via mobile app. Compared to Millennials, Gen X, and Boomers, Gen Z are the least likely to open a new account via desktop

They expect personalization, 24/7 service, and convenience.

  1. Over 40% of Gen Zers are willing to share personal information in exchange for a personalized experience
  2. 64% of Gen Z believe AI will have a positive impact on the world and it can be used to deliver faster, more convenient services
  3. 50% will jump on a brand’s bandwagon if they demonstrate a knowledge of Gen Z beliefs 

They care about things that impact the future.

  1. Healthcare, economic sustainability, the environment, and politics  top the list of issues on which Gen Z is focused. Fifty-five percent of Gen Z choose brands that are eco-friendly and socially responsible. Generation Z will select a financial services brand that has a purpose which helps improve the world.
  2. They take financial issues more seriously at a young age than generations before them; 75% plan to achieve a higher standard of living than their parents.
  3. Gen Z grew up during the 2008 recession and, more recently, the COVID-19 pandemic. They are of the mindset that certainty is a myth and they look to bolster the security of their financial future as best as possible.

Reaching Gen Z

On an individual level, Gen Zers tend to be more engaged with issues that matter to them than other generations have been - whether it’s a debate on geo-politics or if skinny jeans are still in fashion. If your messages resonate with them, you’re likely to remain in their good graces as long as you are consistently authentic. A few tactics that financial services companies can employ are:

  • Influencer partnerships
  • Gamification
  • Select event sponsorships
  • Asking outright for their feedback to influence products
  • Charitable donations and amplifying the action 
  • Aligning and cross-promoting products empathetically by using data to deliver promotions for products that will help Gen Zers secure a more stable financial future 
  • Leveraging word of mouth. Approximately 50% of Gen Z cite the opinions of family and friends as mattering  to them in making decisions about products and services 

Serving Gen Z

Seventy-five percent of Gen Zers say smartphones are the device they use most. Many studies have cited that most of Gen Z can’t go more than four hours without touching their smartphone. Thinking mobile-first is an imperative. Some ideas to serve this generation include:

  • Rethinking your mobile app from the ground up. Incorporate new user research into your design and tech stack to be sure you hit the mark.
  • Evaluating your channel strategy and the platforms you use. YouTube, TikTok (Gen Z even gleans career advice on TikTok), Instagram, and others are where Gen Z lives. Create mobile-specific content for each channel and each engagement. Also, keep in mind how much affinity for a platform can change - Vine was in and out in no time flat!
  • Incorporating AI tools such as chatbots, which can serve up answers dynamically around the clock, into your mobile app. AI is generally more trusted by Gen Z than past generations.
  • Ongoing storytelling to make sure once you have attracted a Gen Z customer, you keep their business and stay true to your brand. Storytelling must work across all screens: phone, PC, TV, tablet, wearable, live-streaming video, IM, and chat. While most of these viewports happen on mobile, you have to be where they are - wearables and even some TVs are connected.

Don’t feel overwhelmed.

Financial services marketers have a number of business critical initiatives on their plate at any given time. With KPIs to hit, quarters to report on, and products to promote, it can be difficult to pause and focus on a very specific target audience like Gen Z, who is new and may not yet have proven their importance to your brand. If you’d like to dive deeper into what Gen Z could mean for your marketing success and bottom line, Phase2’s financial services experts are here to help.

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