Inside the AmEx Brand Strategy Winning Younger Consumers

American Express's strategic focus on personalization, digital innovation, and lifestyle experiences has propelled the brand into the wallets of Gen Z and millennial — offering a potential roadmap for financial institutions aiming to connect with younger generations.

By Liz Froment

Published on July 31st, 2024 in Credit & Debit Cards

American Express isn’t your granddad’s corporate card anymore. In what may seem like a surprising twist, it’s now the hottest card in Gen Z’s and millennials’ wallets. According to Howard Grosfield, president, U.S. consumer services at American Express, these cohorts account for 75% of new consumer platinum and gold card acquisitions in the U.S.

The shift isn’t accidental. It’s the result of AmEx’s strategic effort to understand and cater to the unique preferences of younger generations. And it offers a blueprint for other banks and financial institutions struggling to connect with this demographic.

As Gen Z and millennials’ spending power continues to rise, banks and financial institutions have a unique opportunity to model some of American Express’s success at understanding and connecting with them. What can other financial institutions learn from AmEx?

Key Gen Z/Millennial Research Takeaways

  • 61% of Gen Z and 54% of millennials would switch financial service organizations for a better mobile banking app and digital capabilities.
  • 42% say younger consumers churn more frequently than other generations
  • 28% say younger consumers are more likely to respond to offers/incentives than other segments
  • 41% say younger consumers are less likely to use an account as their primary relationship

Source: Pinwheel’s Primacy Report

Elevating Experiences Means Taking a Lifestyle Approach

American Express is a long-established brand for corporate and affluent cardholders. However, the company has also strategically evolved, understanding that younger generations crave more than just a piece of plastic in their wallets. "We’re investing in our premium value propositions and digital capabilities to add more benefits and experiences that resonate with younger people," Grosfield told The Financial Brand.

Recognizing that experiences are paramount for Gen Z and millennials, AmEx has curated a range of offerings that go beyond more traditional banking benefits and are tuned into this demographic’s interests and desires.

Grosfield emphasizes this shift: "Experiences are at the heart of what millennials and Gen Z care about, and we elevate great payment products with Membership Services that connect people to what they love, including travel, dining and incredible experiences."

AmEx’s lifestyle approach stands out in several key areas:

Curated experiences and events: AmEx goes beyond rewards points and offers cardholders access to exclusive events and experiences.

Travel perks and partnerships: Travel-focused rewards offer partnerships with airlines like Delta and access to AmEx’s luxury travel lounges.

Enhanced everyday spending: AmEx partners with popular brands like Uber, Disney+, Hulu, and Resy to offer exclusive offers and annual statement credits for dining everyday purchases.

Personalized recommendations: AmEx leverages data insights to provide personalized recommendations to cardmembers, reinforcing the brand’s understanding of individual lifestyle preferences.

Prioritizing experiences and lifestyle needs while curating personalized offerings on their digital platforms helps attract younger cardholders and build better engagement and loyalty.

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Digital Innovation is All About Meeting Customer Expectations

For Gen Z and millennials, a frictionless digital experience is not a luxury — it’s an expectation. "Consumers across all ages have become accustomed to seamless digital experiences, but this is especially true for more digitally native generations," Brian Karimi-Pashaki, partnerships lead at Pinwheel, a financial technology company, told The Financial Brand.

American Express has recognized this shift and has taken steps to enhance its digital offerings to meet the needs of younger consumers. Pinwheel has partnered with AmEx to streamline the often-cumbersome process of direct deposit switching. "By partnering with a direct deposit switching API, banks can make this complicated and paper-based process as easy as ordering an Uber," Karimi-Pashaki explains. "This gives consumers more freedom. And more freedom in the market doesn’t just mean better experiences — it means better rates as banks compete to win our paychecks."

"Experiences are at the heart of what millennials and Gen Z care about, and we elevate great payment products with Membership Services that connect people to what they love, including travel, dining, and incredible experiences."

— Howard Grosfield, American Express

This innovation is crucial as younger consumers are increasingly likely to switch banks for a better digital experience. "American Express is listening to what Gen Zs and millennials want," Amanda Swanson, senior director at Cornerstone Advisors, a management and fintech consultancy for banks and credit unions, told The Financial Brand. "They have a robust digital platform that meets these customers’ needs and where they’re going."

She notes AmEx’s success takes a "humanization to digital" approach, meeting customers where they are through their digital offerings and customer service. For younger generations, that’s in-app and online experiences with their bank. A seamless digital experience is a big part of it. Pinwheel’s research found that 61% of Gen Z and 54% of millennials would switch financial service organizations for a better mobile banking app and digital capabilities.

Data-Driven Strategies: The Power of Personalization

Today, in many ways, data is the new oil — one of banks and financial institutions’ most valuable assets. Tapping into the power of customer data allows the company to understand customers on a deeper level and anticipate their needs. Investing in data analytics provides insights into customer behaviors, personalizing offers, and staying ahead of the curve to meet the evolving interests of younger generations. That plays a role in product offerings and advertising approaches to reach these consumers.

"Around 2013, AmEx invested in powerhouse data capabilities to predictively anticipate consumer spending trends. By enriching this owned data with external (non-member) data, they can identify prime customer acquisition opportunities," Katherine Cartwright, cofounder and principal of Criterion Global, an international media buying agency and advisory firm, told The Financial Brand. "Among financial advertiser brands, I’d consider them a first mover in data strategy."

Data also drives personalization. "Banks need to start using their customer data more effectively," says Swanson. "Personalization helps banks tailor communication and put consumers on personalized journeys." Financial institutions can use that data to segment customers and communicate with them based on their individual needs and preferences rather than using a one-size-fits-all approach.

Karimi-Pashaki notes that partnering with fintech companies can add innovation to traditional banking. This deeper understanding enables banks to personalize offerings and deliver the precise products and services specific customer needs. "Many traditional banks are partnering with fintech companies to offer innovative financial solutions tailored to tech-savvy younger consumers," he says. "Continuous insights from fintech partnerships allow financial institutions to stay informed about changes in their customers’ income or behaviors, ensuring they can consistently meet evolving needs."

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How Banks Can Reach Gen Z and Millennials

Reaching Gen Z and millennial customers requires a strategic approach that goes beyond traditional banking methods. Financial institutions must adapt to these tech-savvy consumers’ unique preferences and expectations.

"AmEx is becoming the card for an entirely new generation," Grosfield says. "Our premium products and membership model resonate with high-credit-quality, high-spending younger customers, which means we capture a longer relationship over their lifetime and grow with them into their peak spending years."

Cartwright, Swanson, and Karimi-Pashaki offered some insights that can help banks and financial institutions succeed:

Prioritize the digital experience: Ensure online banking platforms and apps are user-friendly, intuitive, and offer frictionless experiences. Younger generations value convenience and accessibility, so prioritize features like mobile deposits, tools, and easy-to-navigate interfaces.

Speak their language: Avoid banking jargon and communicate in a way that resonates with these consumers. According to Swanson, AmEx has succeeded because "they’re reimagining their language to really speak to the consumers; they aren’t speaking in bank terms."

Personalize and reward: Leverage customer data to personalize offers and rewards. Consider programs that incentivize loyalty and engagement. Cashback rewards, early direct deposit, or discounts on experiences can appeal to their interests.

Focus on financial wellness: Position your brand as one that can grow with this generation, offering personalized products and services as they hit new life milestones. Swanson notes AmEx does well connecting with consumers on Instagram and TikTok through financial education and wellness content, something banks and credit unions can follow.

Implementing these strategies can help banks and credit unions create a more appealing and relevant brand image that stands out to Gen Z and millennial customers, ideally attracting and retaining them long-term. "Banking is often seen as a commodity, and in a high-interest world, customers are able to be picky — even the young," says Cartwright. "Differentiation is mandatory."

Looking for more Gen Z and millennial coverage?

A Blueprint for the Future

American Express’s success in capturing Gen Z’s and millennial consumers’ loyalty provides a valuable roadmap for banks and financial institutions. Embracing a similar approach, focusing on data, experiences, and personalization, can help bridge the gap between traditional banking and the expectations of younger generations.

Banks willing to adapt and innovate can tap into this powerful cohort and cultivate lifelong relationships with them as their financial needs change, positioning themselves for growth and success.

Liz Froment is a financial services writer based in Boston. She specializes in banking, lending and wealth management with an interest in technology. Her work has appeared in Business Insider and The Motley Fool, among others.

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