Attracting Gen Z to your Financial Institution

 
August 13, 2021

Much like millennials, Generation Z has become an important demographic for credit unions to focus on, and differences from previous generations are clear.

Gen Z typically incudes those that were born in the period of 1997-2012, and companies are finding it challenging to understand their desires and motivations, especially as they relate to their consumption patterns.

Differing from millennials in many ways, this unique and creative segment of the population is changing the way businesses and brands are positioning themselves in the market. Business leaders are realizing that Gen Z consumes media differently than other generations, and are adjusting their strategies accordingly.

 

In a recent HubSpot article, they list 52 stats that marketers need to know in 2021, including the fact that Gen Z now outnumber millennials. Along with those stats, there are some other takeaways that are relevant to the financial services industry to determine how financial institutions can successfully market products to Gen Z.

 

Happy casual girl sitting at the table and using smartphone in office

Our top 7 key stats

  1. More than 74% of Gen Z says they spend their free time online — attracting this segment to your credit union means meeting them where they're at through online channels.
  2. Roughly 75% of Gen Z most frequently use a smartphone over a computer or other devices — mobile first design is key to serving this segment through your digital banking channels, and providing the type of member experience Gen Z expects. 

  3. Over 32% of Gen Z transactions take place on a mobile device — having the ability to complete online and contactless payments are key for this segment. 

  4. 60% of Gen Z will not use an app or website that loads too slowly — Optimizing page speed and website load times for online and in-app banking are essential to keep Gen Z members happy. 
     
  5. 62% of Gen Z checks Instagram, while 60% visit YouTube, daily — video for paid and organic marketing can be an effective way to reach Gen Z. 
     
  6. Roughly 65% of the generation sees value in coupons, discounts and reward programs — the Credit Union Times notes that, "strategies to deliver on Gen Z’s desire for more personalized member experiences can include incentives and rewards programs, product bundles and benefits such as fee waivers, cash back, a free Spotify account, VIP concert tickets and gadget insurance." 

  7. Less than 30% of Gen Z will share personal data, such as health, wellness, location or payment information, online — this generation has extremely high expectations for banking security and data storage policies from their credit unions, a point of differentiation that can help set your institution apart if you can offer best-in-class security and be transparent about how member data is used and retained. 

While most of these stats provide value from a marketing perspective to understand how consumers may interact with brands, which channels they prefer and what their views are on things like data sharing, many of these stats can be applied when thinking through your strategic direction as a financial institution.

 

We know that Gen Z engages primarily through mobile channels. When considering how you provide value to your members, the focus for this segment should be on delivering a strong mobile experience. The ability to perform mobile transactions, leverage technologies like chat bots for customer service on your website and app, and being responsive and interactive with members on social media can all play a role in delivering better member experiences, especially for Gen Z. Your strategy should evaluate how your credit union can increase mobile touchpoints to serve members.

 

Visual forms of media that can be consumed quickly are ideal for Gen Z. Whether scrolling through Instagram, or binging videos on YouTube, this segment appreciates the aesthetic appearance of the products and media they consume online. Understanding how you can leverage visual media will be very important to increase business with this segment.

 

Lastly, Gen Z do have concerns when it comes to the sharing of their data. Interestingly, a majority of this segment still prefer to use a traditional bank, likely because they put more trust in established institutions. While this demographic is likely to leverage the new benefits that are coming from open banking, it’s important to think about the security measures you implement at your financial institution, and how you can communicate those in your marketing efforts.

 

Communicating the value you provide in housing their data and protecting them amongst the thousands of data breaches being reported on a weekly basis is sure to increase the trust and appreciation this generation has for your brand.

 

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Editors note: this post was originally published in July, 2020, and has been completely revamped for and updated for accuracy.

Attracting Gen Z to your Financial Institution