A common mistake made by businesses is to lump Generation Z in with millennials. Gen Z is as unique as any generation before it, and as such there needs to be adjustments made on how to reach and engage with them. Financial institutions are no different.
Generation Z is identified as anyone born after 1995. They are the first post-9/11 generation, they’ve only known a world with computers and cell phones and desire security and authenticity. When it comes to their finances, they are conservative with their savings and seek money management skills. According to a study by Raddon, 67% of Gen Z survey respondents have an account at a financial institution, either their own or as a joint account with their parents. Another 4 percent have had an account in the past. And they were as much as times more likely to have taken a financial education class than millennials.
As far as how they prefer to bank, the Raddon study broke Gen Z into three distinct categories:
- Conventionals (34%) – This group prefers the face-to-face interaction at a traditional bank. They are distrustful of technology companies entering the banking space to provide financial services.
- Digitals (37%) - Like Conventionals, Digitals like traditional banks but would rather interact digitally than in person. They don’t see digital companies replacing their relationship with their bank.
- Pioneers (28%) – This group embraces technology companies and the new opportunities they can provide over banks and credit unions. They will bank traditionally if they need to.
The big take-away from the study is that Gen Z wants to be educated on financial decisions. They don’t want to make the same mistakes as previous generations, like getting mortgage loans beyond their means (Baby Boomers) or incurring huge student loan debt (millennials). Forty-nine percent of Gen Z either already use or are likely to use no-overdraft checking compared to 19 percent of all consumers.
The study also offers some ways that banks and credit unions can connect with Gen Z:
- Offer digital capabilities like remote deposit and mobile banking , as well as a physical location.
- Be careful with bank fees and credit card interest, give “safe” checking account options like prepaid debit cards and accounts that don’t allow overdrafts.
- Because they like to save, offer budgeting tools and savings incentive products .
- Offer automatic deposits to savings accounts and allow them to direct savings into specific accounts earmarked for college, cars, etc.
- Offer education classes or podcasts on how to budget, save for college and manage credit.
If you would like to know more about how NASB can help provide you with digital banking , special checking accounts , or financial education, contact us at 855-338-0915, or click here for more information.