5 Gen Z Myths, and 5 Things they Actually Want from FIs
As an iced-coffee-drinking, selfie-taking, house-plant-loving, certified Millennial, I have read countless op-eds and think pieces over the years on what Millennials want, who we are, and what industries we have supposedly killed (my apologies to paper napkins and Applebees). However, I rarely saw myself or my friends truly reflected in these articles, which felt more like hit pieces than actual insights.
“Gen Z will be 27% of the workforce by 2025.”
No wonder financial institutions mostly missed the mark on Millennials. They didn't understand our needs, perspective, or how to effectively market to us. It seems like few traditional sectors did.
We are now seeing the same type of articles being pushed about Gen Z. Born between 1995 and 2015, the oldest in this cohort are now 27 years old. They are not “the kids” anymore, they are on track to make up 27% of the workforce by 2025.
“48% of Gen Z prefers face-to-face banking over digital channels”
Utilizing research and sources that have actually surveyed this generation is necessary to understanding how to best serve them.You just might be surprised to learn that 87% of Gen Z use a traditional bank, and 48% of Gen Z prefer doing their banking face to face rather than digitally. Also, Gen Z is showing early signs of greater financial savvy than my Millennial cohort including strong adoption of bank accounts in their high school years, and even participation in the stock market through retirement planning at 28% compared with 19% of Millennials at the same age.
“28% of Gen Z already holds stocks for retirement planning compared to 19% of Millennials at the same age”
Here are 5 common myths that I see perpetuated within the financial industry, and offer up 5 things Gen Z actually does want from a financial institution. Financial institutions can’t afford to miss the mark with Gen Z too.
Myth #1: Gen Z can only be reached in the digital space.
Just like all of us, Gen Z utilizes and loves technology… when it works. They want to use streamlined technology but are willing to forgo tech for more traditional options if the technology is difficult to use or ineffective. Long story short, don't try to appeal to Gen Z using ineffective digital tools. Use your strengths to appeal to them, do you have great loan rates, or financial literacy classes? If you can't capture them in the digital space, find a product or service you offer that will meet their needs.
Myth #2: Gen Z opts for fintechs over traditional financial institutions.
While the use of fintechs is steadily increasing, research shows that 87% of Gen Z still bank with brick and mortar financial institutions. Capturing this audience isn't the obstacle. Ensuring that you are meeting their needs, and building a trusted relationship is the key to maintaining and growing Gen Z members.
Myth #3: Gen Z uses very limited financial products.
Following up on the second point, many people assume that Gen Z are using less financial products and sticking to using fintechs with basic offerings. The reality is, they are deeply concerned about financial literacy, home ownership, and saving for the future. This generation has seen the financial difficulties Millennials face and want to bank at an institution they feel confident with. As a financial institution, take a step back and evaluate where you are today, and your ability to serve them. Now could be the perfect time to shake up your marketing, branding, and possibly even product offerings.
Myth #4: Gen Z is shortsighted and doesn't think about their financial future.
They want to be financially educated, and think in terms of the bigger picture. While the internet is a great resource, Gen Z understands the limitations and want to be financially literate and are willing to learn if they have access to the resources to gain this knowledge. They have witnessed the financial hardships Millennials are experiencing, and they seek resources to help them avoid our fate.
Myth #5: They don't care about human interaction or customer service.
All of us, no matter what age group, want genuine human interaction. Even people who prefer a digital interaction want to feel like there is a person on the other end who understands and wants to help them solve whatever issue they may be dealing with. Not only do they want in person interaction, they want to bank with a financial institution that aligns with their beliefs and morals.
Gen Z is going to grow into one of the smartest and most well connected generations we’ve ever seen. They are inquisitive, they care about the world around them, and want to reach financial independence in an increasingly complicated world. We have the opportunity now to not only help them reach these goals, but better ourselves and our brands in the process.