How Banks Can Win Loyalty of Money-Savvy Gen Z

With many members of Gen Z already conducting their own online research and turning to influencers for financial advice, banks and credit unions need to strategically position themselves for this next generation of self-reliant customers. Here's how to set your brand apart from the digital competitors Gen Z leans toward.

If there are any members of Gen Z in your family or within your social network, you may not expect them to step into your branch and ask the teller about opening an account. They also may not be likely to reach out to local financial advisors for help on what to do with their savings.

Gen Z are largely self-reliant when managing their personal finances, and over the last few years, influencers have been fueling the fire of their independent approach. In fact, one study from GOBankingRates reports that 46% of Gen Z learn about personal finance from TikTok, YouTube and independent research on forums like Reddit. This is double the amount that learn from parents and family members (23%).

Whether it’s bank account reviews, finance app comparisons or strategic partnerships for the latest challenger banks, influencers are serving up the information that Gen Z are seeking. And the millions of views, likes and comments on those YouTube and TikTok videos are the proof of how much weight Gen Z puts into an influencer’s perspective.

The Way Into Gen Z's Heart:

Social media influencers are an integral part of how Gen Z finds out how to handle their money.

For banks and credit unions, the current financial landscape for Gen Z is a prime opportunity to look at the market and see how they can position themselves in a competitive way.

To win this younger generation over, financial institutions must look beyond tactics where they simply appear in Gen Z’s feeds as they scroll and swipe — they must look critically at how they can make them pause, consider the value of their products, and ultimately how to turn them into lifetime customers.

Here are three practical ways for your financial institution to win the confidence and long-term loyalty of Gen-Z.

Demonstrate You Understand Their Unique Banking Needs

According to one study from Deloitte, Gen Z fears commitment and the unknown when it comes to their finances, and worry that the financial choices they make today may result in missing out on better alternatives in the future.

They can accomplish this by focusing on understanding long-term pain points and demonstrating how they can provide a long-term solution that outmatches competitors.

For instance, after high-school graduation, many young people are thrown into the deep end of making some of the biggest financial commitments of their life: deciding whether or not to apply for a student loan, financing a car to get to school and work, choosing their first credit cards, and more. Banks and credit unions can focus on educating younger customers how to navigate these decisions cautiously and avoid the common pitfalls of amassing long-term debt at an early age.

From what we’ve seen in the last few years from the emerging fintechs and finance app partners in our own influencer network, education often takes the front seat. It can be in the form of hosting local workshops at high schools and universities, creating online content to answer Gen Z’s specific questions, and technology investments into enhancing mobile capabilities.

In other cases, financial education is built directly into their technology’s functional features, such as dashboards illustrating deposit versus withdrawal activities, and insights into purchasing patterns for the customer’s own self-awareness of their financial habits.

Food for Thought:

Gen Z loves learning about their personal finances. Banks can help by educating them about credit card debt, student loans and more on social media.

Gen Z has a “deep desire to better understand money” according to The Financial Brand’s findings, and it’s critical that financial institutions demonstrate that they can provide long-term value in helping them make healthy financial decisions.

Build Brand Credibility Through Influencer Partnerships

As much as brands work tirelessly on building their identity, their image is often dictated by what others say about them. Gen Z that are searching the web for reviews and following finance influencers are looking to get a pulse on these conversations. And this is where influencer partnerships come in.

Trusted influencers can provide prospective customers what they’re looking for: honest, authentic opinions of your products to gauge if it’s the right fit. Influencers can provide this earnest point-of-view through reviews, comparisons with competitor products, and other types of content.

Before you reach out to influencers for partnerships, start by reflecting on what you have to offer younger consumers, whether it’s a product, program or features that differentiate your brand and make it stand out from the competition. For instance:

  • Do you have investment accounts that haven’t seen much traction from younger customers?
  • Do you support or sponsor recreational programs for high schoolers?
  • Have you provided small business loans to young entrepreneurs, such as those opening their first food truck, or those in the gig economy?
  • Do you offer scholarships, grants or bursaries to help fund tuition?

Once you identify your most valuable offerings, you can then narrow your influencer search to ones that represent the personas you’re targeting, and approach them with products that can solve their unique pain points and, in turn, those of their audiences.

If we look back at the examples mentioned earlier, this could mean influencer partnerships with:

  • Crypto and stock trading influencers.
  • Local dancers, local university athletes on TikTok — perhaps even jump rope content creators.
  • YouTube creators that are young, business-minded entrepreneurs.
  • Any variety of influencers that teenagers follow, including makeup, consumer tech reviewers and more.

Within our network, our financial brand partners have dipped their toes into the water by partnering with a select number of influencers to start. Once they understand what audiences are receptive to, they can then expand their influencer partnerships further.

By finding the right influencer partner that believes in their offerings, financial institutions can forge authentic, trustworthy relationships with Gen Z audiences.

Strengthen Your Retention Tactics

As challenger banks and emerging fintechs continue raising the bar for managing personal finances, it shouldn’t be a surprise if your new young customer’s eyes sometimes wander to these competitors. They may be boasting lower interest rates, or running flashy, large-scale awareness campaigns.

To counter these distractions, banks and credit unions must determine what keeps a Gen Z customer in it for the long haul. The first question to answer is “What do these customers care about?” and then look at the competitive landscape for how those needs are addressed, including the type content that’s being created around it. From there, they may consider how to optimize the experiences for customers to keep them engaged over a long period of time.

It’s essential that financial institutions are able to answer these questions sooner than later, because Gen Z are getting an early start in the wealth-building game. According to the 2021 Transamerica Retirement Survey, the median age for beginning to save for retirement is 19 for Gen Z, compared to 25 for Millennials.

Get Started Early:

Gen Z is already starting to save for retirement. Seriously. The median age for them is 19.

Gen Z are looking to make moves with their money earlier than ever, and financial institutions that can be there to win their business early can also be there when Gen Z think about starting a business, applying for their first mortgage, financing their wedding and looking at education savings for their first child.

Banks and credit unions that can maintain healthy, active relationships with their customers will be in a prime position to retain Gen Z customers for the long haul.

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