Young Women Are Getting Richer: Marketing Tips for Banks

Young women are getting richer. Over the next 20 years, $80 trillion will change hands as older generations leave money to their children — and millennial and Generation Z women are expected to benefit. Millennials already make up the majority of the American workforce, with Gen Z following quickly behind.

Although millennials and Gen Z women are expected to benefit greatly from this transfer of wealth, banks are still not treating these groups as serious potential customers. Just 9% of financial services executives in a recent Capgemini survey say they are targeting Gen Z customers right now. The vast majority (94%) of women feel their economic power is being underestimated, according to a survey from Ellevest.

“Millennials and Gen Z are looking for banks that get them,” says Katya Varbanova, a brand marketing consultant. “One of the biggest pain points of Gen Z and millennials is they feel robbed of the opportunities that their parents had. They are generally at a disadvantage and they don’t feel like most brands understand that.”

Long-term, ignoring the unique needs of young women could have big impacts for banks, particularly community banks and credit unions, which tend to have an older customer base already. Baby Boomers were less likely to bank with megabanks and more likely to bank with community banks compared with younger generations, according to a survey of 26,000 banking customers from software company EPAM. Just 36% of Boomers say they bank with megabanks, compared to 48% of millennials, according to EPAM data.

Big or Litte Banks:

A little over one third of Boomers bank with a megabank, compared to almost half of Millennials.

A big mistake that banks make is using the same marketing tactics over, and over again and expecting different results, Varbanova says. Instead, banks need to develop new digital marketing strategies that specifically acknowledge the unique needs of young women.

“What banks need to realize is that the online culture has changed so significantly,” she says. “You can’t even compare social media today to pre-2020.”

Here’s how bank marketers can develop strategies specifically to attract more Gen Z and millennial women customers.

Understand the Unique Motivations of Gen Z & Millennial Women

When developing any good marketing strategy, it’s important to consider the motivations of the group you’re hoping to target, says Chandramouli Venkatesan, vice president at Capgemini. Generations are not monoliths: When you design a marketing plan with a specific generational stereotype in mind, you neglect to factor in the diversity and complexity of the needs of different individuals.

“It’s probably not the best idea to single out a segment,” Venkatesan says. “What’s important to look at is the attitudes, behaviors, and motivations. Even within a specific demographic group there can be different behaviors and preferences.”

User research can help banks better identify the specific needs of millennial and Gen Z women, he says. Knowing women are expected to be the recipient of a major wealth transfer, for example, banks could consider pushing marketing campaigns focused on legal support, inheritance planning and tax consultation services.

“When you’re choosing for your research, you need to have representations from these edges,” he says. “We look at what those commonalities are, those commonalities are going to help you to hit a larger group.”

Banks can also use transaction data to better market to Gen Z and millennial women, says Amanda Swanson, senior director in the Delivery Channels practice at Cornerstone Advisors. For example, if someone is spending money at Lowe’s or Home Depot, a targeting marketing campaign for a home equity line of credit (HELOC) might make sense.

“If they have a debit card with you, are you starting to mine that data as far as where they’re spending?” she says.

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Gen Z and Millennial Women Want Brands They Can Connect With

Young women want to buy from brands that align with their values, Swanson says.

“They want to see the value and quality in that brand they’re connecting with, whether it’s a bank or credit union, they have to see themselves being a partner to that brand,” Swanson says.

Marketing campaigns that foster emotional connection with customers are going to be more successful, Swanson says. “There needs to be that tie between the rational piece, but there also needs to be an emotional connection,” she says. “A bank or credit union needs to understand what that sweet spot is and have an integrated marketing campaign that focuses on that.”

One way that community banks can foster this emotional connection is through storytelling, Varbanova says. For example, banks could create marketing campaigns that focus on small business owners or customers that by using the banks services, were able to purchase their first home. Banks can also emphasize programs that support the local community, she adds.

“They don’t want to just make wealth, they want to make sure their wealth does good,” Varbanova says.

Dig deeper: How Bank Marketers Can Come to Grips with Growing Wealth Gap

Skip the Product-Focused Marketing Campaigns

If you’re spending marketing dollars on ads for a specific product, it’s probably time to change up your strategy, Venkatesan says.

Instead, banks should focus marketing efforts on creating an experience for clients. Big companies like Amazon or Disney do this well. Even though these companies offer a variety of different products and services, they do a good job of integrating everything into one, seamless experience for customers.

“A customer might have multiple relationships with you and they miss an opportunity to build those client centric experiences,” he says. “Product centric experiences are a hit or a miss.”

“Millennials and Gen Z are looking for banks that get them. One of the biggest pain points of Gen Z and millennials is they feel robbed of the opportunities that their parents had. They are generally at a disadvantage and they don’t feel like most brands understand that.”

— Katya Varbanova, brand marketing consultant.

The most successful campaigns connect products to a particular mission or aspiration, Varbanova says. Tesla is another example of a company that does this well. The perception is that owning a Tesla will not only impress your friends, but also help you reduce your carbon footprint.

“If you can market your products and services that meet the aspirational aspect but also have a huge focus on sustainability and social responsibility, that is really the sweet spot,” she says.

It’s Time to Get Digital

Millennials and Gen Z are digital natives. Gen Z, in particular, grew up using technology — and this isn’t set to change anytime soon. Children ages 8-18 spend an average of 7.5 hours per day in front of a screen, according to data from the Kaiser Family Foundation.

For the best chance at capturing the attention of younger generations, banks should ensure they are meeting them where they are. This means having a robust social media presence on apps like Instagram and TikTok, Swanson says.

“A lot of them are looking at influencers, they’re going to TikTok, they’re doing those short form videos,” she says.

Connecting with influencers and well-known members of the community is one way that community banks can do this successfully, Swanson says. First State Bank in Michigan, for example, recently did a campaign with Kansas City Chiefs defensive end Mike Danna. Targeting influencers that are popular with millennial and Gen Z women, can help draw them into the brand.

“I think banks and credit unions need to start thinking about how they get to that emotional heart,” Swanson says.