Do you know what Millennial and Generation Z (Gen Z) customers really want from your bank?
This year, Gen Z will make up 32 percent of the global population, edging ahead of millennials who will account for a 31.5 percent of the world population of 7.7 billion.1 Because Millennials and Gen-Zers are the two largest generations in the U.S. labor force, it’s critical for banks to know what these groups really want in order to compete and succeed in the constantly evolving financial sector.
How do you win them over and retain them for the future?
It’s important to realize that Millennials and Gen-Zers have a distrust of large financial institutions, and it’s easy to understand why. For their entire lives, banks have been embroiled in scandals, fraud and a lack of transparency.
To create ideal banking experiences, retail banks must rebuild trust by being transparent and truly understanding and supporting of their values.
Millennials and Gen-Zers, for example, are less interested in the accumulation of wealth than previous generations and more interested in socially responsible or impact investments. According to Swell Investing, 84 percent of Gen Z investors are either already invested in socially responsible investments or plan to invest this way in the future. In fact, nearly 31% of Gen Z investors are willing to allocate 50 percent or more of their investments portfolio to impact investments and one in four millennials would do the same.
Deliver engaging, seamless end-to-end experiences.
Retail banks that only deliver financial transactions, rather than experiences, are destined to fail. Millennials and Gen-Z are digital natives who have played a significant role in driving the growth of the digital economy. More technologically savvy than older generations, they expect superior digital services that continue to evolve and expand as new technologies emerge. Traditional banks need to commit to providing digital solutions for millennial and Gen-Z banking needs, or risk irrelevance.
A majority of Millennials and Gen-Zers bank online and are used to online banks with minimal paperwork and compliance requirements and a user friendly experiences that does not push products. They can still be won over, however. Millennials and Gen-Zers like a combination of high-tech and high-touch. Retail banks that focus on delivering seamless, tailored personal end-to-end services online and in their physical locations can create the competitive differentiation needed to attract and retain these savvy customers.
The Financial Brand article, Trends in Branch Design from Banks and Credit Unions Around the World, features descriptions and photos of the innovative approaches a number of banks are taking to create seamless physical-digital experiences that foster deeper customer engagement.
DBS, has launched a lifestyle space for the tech generation that includes café and branch concept. The open layout atmosphere is a perfect setting to enjoy an espresso while relaxing with friends. There is a VR corner for retirement planning, advanced ATMs with video tellers for cash deposits and withdrawals and Pepper, the humanoid robot is on hand to help customers with questions about how to use machines or where to find information about service offerings.
Union Bank’s ‘The Ark’ concept, integrates touch screens, augmented reality and video walls to create interactive experiences like the virtual reality showroom where prospective car buyers can try out premium cars using VR.
Halifax-Oxford Flagship Brand is a large, 13,500 square foot branch that is open seven days a week. It features multiple hubs including one for travel where customers can get advice on saving for their trip and order and exchange over 50 currencies; for home lending where customers can get help on all steps of the mortgage process.
Provide the right financial information at the right time in the right place
Millennials and Gen-Zers want financial advice and more. They want to be counseled about budgeting, on their debt and how to finance the experiences they value. Forward thinking banks will create an ecosystem of partners who can respond to these needs.
The 2018 Retail Banking Advice Study by J.D. Power found that millennials are more receptive to bank advice than generations before them. Customers ages 25 to 39 had the highest levels of satisfaction with bank-provided advice and only 9% of customers from this age group felt the advice they received added little value. A key takeaway from the study is that banks have a great opportunity to provide financial guidance and advice using a combination of digital and in-person interactions.
Accessibility is also important. Millennials and Gen-Zers wants to meet, often at nontraditional times, over the phone, at a coffee shop or by video conference. Retail banks need to flexible and open to new ways to share information. Transparency about fees is also essential. Customers do not want to be nickel-and-dimed for bank services.
How to make it happen
Leveraging big data and customer analytics provides deep, actionable insights that can help retail banks understand and deliver what Millennials, Gen-Zers (and all your customers) want.
Would you like to learn more about how you can rebuild trust; deliver engaging, seamless end-to-end experiences; and provide the right financial information at the right time in the right place?
Read this brochure, visit our website or register for the webinar, Embrace Disruption – How Retail Banks Can Thrive in the Connected Economy.