Financial Industry Trends: Deciphering Gen Z’s Surprising Preferences
As Gen Z enters the workforce, they become a growing market for the financial industry. They are now the youngest banking generation, which means it’s essential for financial institutions to understand their needs, behaviors, and preferences.
Despite its importance, understanding this generation’s financial preferences is not nearly as solid as it should be. In reality, Gen Zs banking preferences underly the future of the financial industry.
So what are the branch banking expectations and desires of this group? Let’s take a closer look.
What Makes Gen Z Visit a Bank Branch?
Previous generations went to bank branches for their everyday banking needs, like depositing checks, withdrawing money, etc. While Gen Z is not as keen to visit bank branches for these financial activities, they are interested in visiting for other reasons.
46 percent of Gen Z respondents would attend a bank branch for drop-in financial advice, and 43 percent would be more likely to visit if the bank provided a financial experience center. Beyond that, 40 percent said they would visit financial education centers.
The overall trend here is that Gen Z wants to visit bank branches for financial literacy. Traditional financial services won’t entice them to visit in person. Using mobile and online banking for everyday banking needs is far more convenient and suits this generation’s technology upbringing.
However, financial advice is a massive motivator for Gen Z to visit bank branches. Banks that prioritize these features will be more likely to draw Gen Z customers into physical branches.
Shortage of Financial Education
Gen Z values financial advice so much from a bank branch because they feel access to financial education is more important than ever. The last year demonstrated the importance of financial knowledge and the risks of not being educated for many. The pandemic disrupted so many aspects of daily life, which made finances even more difficult for these young adults.
Beyond that, many Gen Zers are young adults. They are making new financial decisions and leaps for the first time. They may be looking to buy a home or start a retirement savings account. Navigating these new decisions can be confusing and stressful, which is why they are looking for guidance.
For this reason, 61 percent of Gen Z says that they want advice on managing money from their bank or credit union. Again, this creates a clear opportunity for financial institutions to win over this generation. Offering both online at in-person solutions is an excellent way to attract and retain this customer base.
Alternative Income and Investing
One primary source of fuel behind Gen Z’s interest in financial advice is their involvement in alternative sources of income. Unlike older generations, Gen Z is far more involved in gig and freelance work. A 2020 survey found that 50 percent of Gen Z respondents (between 18 and 22) participated in freelance work.
Their involvement in freelance work means that financial activities are not always as clear-cut for this generation. Gen Z is also more interested in and more involved in alternative investment opportunities, like cryptocurrency. Thirty-six percent want their bank to offer cryptocurrency investing. They trust their banks more than cryptocurrency providers but still want the opportunity to invest in this new market.
Social Responsibility From Financial Institutions
Younger generations also want greater social responsibility from their banks. Over half of Gen Z respondents expect this.
As consumers, Gen Z is more focused on the values of the companies they interact with. This comes in part from recent current events this generation has witnessed. Financial institutions should share information on how they contribute positively to social responsibility.
Bank of America’s Finacial Wellness App
One example of a bank that’s meeting Gen Zs preferences is Bank of America. They created a financial wellness app that serves as an “engagement platform” rather than just a tool.
The platform facilitates two-way communication between customers and the bank, all to help this generation meet their financial goals. Commonly, people use the app to meet goals like budgeting, improving credit, saving for a purchase, retirement savings, or buying a home. Customers do not need to enter a ton of information to get started either. They can get up and running in a matter of seconds.
The majority (62 percent) of customers who adopted the app are younger generations, Gen Z and Millennials. The app is also a driver for human engagement. In just one year, Life Plan prompted one million follow-up appointments with BofA financial professionals (online and in-person).
Teksetra is Here to Help
To some, Gen Z’s banking preferences are surprising. While they want digital solutions, they also want a branch experience that includes financial advice and wellness programs.
To meet the needs of this generation, your bank needs to have its technology in order. That’s where we come in. Teksetra provides technology solutions for financial institutions to help you create the best branch and online experience possible. We offer device repair/maintenance, IT support, third-party logistics, audiovisual/digital signage, project services, and more.
Our team is here to help your bank meet the needs of Gen Z and all other customers. Contact our technology experts today to learn more about our financial industry s
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