Understanding Gen Z’s Relationship with Financial Institutions

Generation Z is arguably the fastest growing segment of banking customers. According to ABA Banking Journal, Gen Z will soon edge out Millennials and become the largest demographic in the United States, with an estimated purchasing power of more than $44 billion collectively. Moreover, Gen Zers came of age more than a decade after the financial crisis that prompted the Great Recession, and their generation has never known banking that isn’t mobile-centric.

The difference between Millennials and Generation Z

Generation Z consumers are markedly different from their Millennial counterparts. Generation Zers are the obvious beneficiaries of mobile technology, growing up exclusively in the Internet age. Also, unlike Millennials, many Gen Zers grew up watching their parents struggle (and sometimes lose their homes) in the Great Recession.

Now, Generation Z is skeptical of taking on large amounts of debt to achieve their personal and professional goals. About 70% of this demographic are concerned about how much they should know about finances, as well as how they will afford major life goals (i.e. buying a house).

Because of the differences between Gen Z and Millennials, and the enormous buying power that Gen Z will one day have, financial institutions must take care to engage them in a different manner. So, the next generation of banking customers will be drawn to digital solutions that are streamlined, intuitive and available at a touch of a button.

The challenge of attracting Generation Z

Attracting young, new banking customers may be a significant challenge for credit unions and community banks, especially those whose average account holders are getting closer to retirement age. An estimated 19% of Gen Zers have an account with a credit union, and 12% have one with a community bank.

As fewer account holders may visit bank branches, financial institutions are increasingly concerned about how to engage this new segment of their audience and establish primary banking relationships.

Developing digital relationships is a key to attracting younger customers. This challenge can be handled with a knowledgeable and committed partner.

Larky and Generation Z

Larky is the partner that financial institutions look to when establishing compelling, effective mobile advertising campaigns. Larky’s promotion models generate targeted geo-notifications to drive qualified leads in contrast to huge, ineffective expenditures of billboards and traditional advertising. The mobile approach is effective because it focuses on potential customers where they are, and through a medium they use the most: their mobile devices.

However, banking relationships do not reside exclusively in mobile phones, tablets and laptop computers. Gen Zers still appreciate the personal interaction that comes with visiting a branch and engaging with another person. Therefore, a mobile advertising campaign must encompass the human experience.

Larky helps financial institutions cultivate new contacts that lead to lasting primary banking relationships. Contact Larky to learn more about their strategies and product offerings.