A recent Pew survey predicted that by 2028, Gen Xers will outnumber Boomers, with millennials having already passed them in 2019. Gen Zers are also becoming a desirable market. Clearly, this younger market is now crucial to financial institution (FI) growth. Attracting them requires understanding that they insist upon online and mobile banking.
In fact, according to Gallup, nearly 60% of Americans demand an online service from their financial institution. Gallup also found that those account holders who do prefer digital options tend to be millennials, Gen Xers and students. So, it is vital to understand the ways that these younger people want to deal with their FIs.
By 2023, more than 35 million people are expected to bank solely via their smartphones. Indeed, 61% of internet users already bank online. The ongoing developments in instant money transfer apps are adding to the rapid growth in mobile banking as more people use them.
Essentially, the younger market demands mobile banking and would leave an institution without it. Among the features most important to these users are:
- Easy online check deposits: Convenience is key for this demographic. The easier it is to complete any sort of financial transaction, the more value the FI will present.
- On and off feature on debit cards: Millennials spend more through debit than credit cards, so protecting their cards is crucial.
- Finding a nearby no-fee ATM: Younger account holders also want to know they are getting the best bang for their buck. This group favors flexibility and is constantly on the go, so knowing they can access their money without getting charged is a big selling point.
- Mobile payment options and apps: In 2017, 70% of Gen Zers made a mobile payment. Years later, mobile use and payment flexibility have only grown, so FIs can’t compete without good options in this arena.
- Real time and place alerts and notices: Location-driven data is valuable to help account holders find offers that are most beneficial for them at that time.
Targeted communication reaches users
Starbucks knows this, and FIs should too. With targeted communication tactics, FIs can alert their account holders of products and services that are contextually relevant. The Larky Nudge® platform enables quick and valuable engagement as well as easy cross-selling opportunities through these targeted notifications.
Armed with these capabilities, FIs can reach account holders at the right time and place, offering simple and convenient interactions, whether that be discounts, perks, promotions or updates.
The more of these services a financial institution offers, the more likely it is to attract this target demographic.
Both FIs and their account holders are uneasy about online banking because of the lack of personal interaction. Not every problem that comes up can be addressed on a FAQs page. Sometimes it’s just necessary to talk to someone human.
While customer service phone lines have long handled this type of interaction, everyone knows about the high cost, potential language difficulties and long wait times with phone options.
The younger market, particularly Gen Z, considers a chat function to be essential. A growing number of FIs are changing to one of the growing variety of online live chat apps to handle account holder interactions. Further, a recent survey found that 75% of people actually prefer live chat to any other way to contact their financial institution. The bots also provide value to the FI by allowing it to more easily gather certain account holder data.
As people place more of their financial lives online, they are also more concerned about the security of that information. FIs seeking to increase their online business need to respond to this concern.
One of the practices younger people prefer is dual-factor authentication. This makes it slightly more difficult to hack into an individual account. Strong FI data encryption is also essential to maintain online banking. Finally, although most users don’t, it’s important to use strong and unique passwords. Encouraging and enabling these practices will show potential account holders that the financial institution prioritizes their data security.
To reach this target group, financial institutions must have a robust, secure and flexible online presence. They must also offer unique and valuable apps to the younger market.
The Larky Nudge® platform enables FIs to send alerts at the right time and place, helping them build their presence and provide more value to account holders. Larky’s lock-screen push notifications, combined with an FI’s existing platform, can be used to enhance service and ease of use to all users, particularly those younger users who expect that from their FIs. To learn more, contact Larky to schedule a demo.