When you think of current and potential banking customers under the age of 30, you probably think of a digitally savvy customer who values ââa fast and easy experience. After all, Millennials and Gen Z customers are redefining consumer preferences, workplace expectations, and technological innovation.
A recent poll Oracle, however, paints a more nuanced picture. When it comes to their finances, this subset of young clients – some of whom have gone through several recessions before – are often anxious and perceptive. These trends create an opportunity for traditional banks to establish long-term lucrative relationships with this group.
Big tech companies like Google, Apple and Amazon are investing heavily in personal finance solutions in an attempt to capture part of the banking market. But traditional banks have one important advantage: trust.
For those under 30, âtrustâ is by far the first priority when looking for a long-term financial partner. According to a BAI Banking Outlook 2021 report, nearly two-thirds of Gen Z customers between the ages of 18 and 24 use the same financial services organization as their parents.
Here are some ways that banks can increase their confidence with young customers and keep competitors away from Big Tech.
Be strategic when choosing digital battles
It may be in the best interests of banks to worry less about third parties allowing digital payments for things like reimbursing a friend for dinner, and more about capturing important, long-term consumer buying decisions like buying. a house or planning for retirement.
Tech giants have excelled at using customer data to give customers the right thing at the right time. Banks can emulate this tactic, for example by offering customers a better targeted deal when they are first notified of a home search or initial interest in a home purchase. This plays into the strengths of the bank, given that one in four customers under the age of 30 say they automatically chose their primary bank and did not seek advice from family, friends or third-party websites for the mortgage process.
Oracle’s study found that consumers under the age of 30 are more interested in personalized advice and help when choosing a banking provider, obtaining a loan, or making business decisions. ‘investment. Younger customers want tailored ‘instant’ offers to help them make the decisions they’re more likely to make at a younger age. For example, those under 30 rated personalized budgeting tips as “most helpful.”
To tackle personalized budgeting, for example, banks could provide personalized tools, calculators, and content that help Millennials and Gen Z meet their current financial goals, whether that’s paying off a student loan or paying off a student loan. ‘to buy a car. These offers open the door to a longer term relationship through future line of credit or investment offers.
Post-pandemic banking is likely to consist of a mix of physical and digital channels. Surveys indicate that millennials and young consumers are among the most likely to return to physical bank branches. This is probably due to the fact that younger clients are still uncertain about the financial space and therefore seek more advice on making the right decisions.
Hold clients’ goals accountable
While younger customers are often open to experimenting and trying out new digital tools, customers under the age of 30 want to protect and strengthen their hard-earned savings. According to the BAI survey, 75% of Gen Z customers plan to achieve a higher standard of living than their parents.
While most Gen Zers aren’t quite at the home ownership stage yet, many clients under the age of 30 are starting to buy real estate and could use a trusted banking partner. Prospective mortgage customers deserve high level service, transparency and access. However, Oracle’s survey found that nearly two in five consumers are âdissatisfiedâ with their mortgage experience. Indeed, six in ten say they have chosen their main bank for a first mortgage, but only half of them say that they would use the same institution for their next mortgage.
To be the benchmark for mortgages, banks must invest in improving the convenience and simplicity of the mortgage application and approval process, as well as improving communication throughout the experience. loan.
While young bank customers have their own preferences and habits, banks still have the opportunity to build customer loyalty. By investing in the resources needed to deliver a more personalized and streamlined digital banking experience, banks can grow their business with this new generation of customers.