Winning the Rising Wave of Next Generation Banking Consumers

The events of the past year have had a significant impact on how individuals, especially younger generations, approach their personal finances. According to a recent study from Next Caller, a Pindrop Company, 74% of Gen Zers and millennials say they are more interested in saving, investing and taking out loans than they were a year ago, perhaps signaling an ongoing trend of individuals jumping at the opportunity to take advantage of low interest rates, refinance opportunities and a booming housing market.

For credit unions, this presents a window of opportunity to leverage traditionally attractive rates, terms, fees and a personalized approach to win new business. But considering this younger demographic has typically evaded credit unions in favor of national banking options, it may not be that simple. In fact, the same study mentioned above found that millennials are the least likely age group to exclusively bank with a credit union.

Today, some credit unions are finding themselves at an imminent crossroads: Deploy strategies to attract younger generations and capitalize on the growing engagement from this audience, or risk further isolating them and potentially compromising long-term growth opportunities.

Meeting Digital Demands

Today’s younger generations have become accustomed to integrated digital experiences in most areas of their lives, priming them to expect them from any brand with which they do business. If we assume that these expectations also carry over to their financial lives, some consumers may now be reprioritizing what is most important in a banking partner. In the past, the proximity of a physical location or ATM, an attractive promotional rate or the familiarity of a logo may have been enough to compel their choice. Today, a personal, consistent, flexible and seamless digital experience has sway. The financial institutions that find a way to personalize interactions and anticipate needs are likely to win.

Millennials are also nearly twice as likely to say that “a better digital/mobile experience” was influential in their choice of financial institution than Gen X and boomers are. While it seems that younger generations will likely continue to prioritize digital innovation, credit unions would be wise to meet their evolving needs by offering mobile-friendly experiences that prioritize ease of use, flexibility and personalization.

Elevating the Member Experience Through Exceptional Service

Customer service is often an important consideration when choosing a financial institution, but today there seems to be less room for error than ever before. More than a third of U.S. Gen Z and millennial banking consumers say they’d switch banks after only one or two poor customer service interactions. When combined with the fact that more than 50% of millennials say they are now less willing to engage with technology like chatbots and automated systems than they were before the start of COVID-19, according to a Next Caller study, a trend is emerging. Younger consumers have less tolerance for poor, impersonal customer service.

Thankfully, as destructive as a bad experience can be for gaining or maintaining customers or members, the opposite is also true. Good experiences matter. As consumers reach out for help, the ability to anticipate their needs, show empathy during difficult circumstances and deliver a consistent experience across channels can help to secure long term brand loyalty.

Preparing the Contact Center

While the above service experiences need to be woven throughout the organization, a good place to start is the contact center. After all, it may be the first place many new members and existing members turn to for their needs. And first impressions last.

In an effort to adapt to the complexities brought on by COVID-19, many contact centers have likely turned to technologies like artificial intelligence and machine learning, which help to streamline operations with features like voice assistants and IVR self-service capabilities. However, while technology is a useful supplement, it can’t replace the desire that many consumers have to speak to another human when a financial need arises. And not just any human, either. Many consumers today expect service reps to know their purchase history and contact information as soon as they start speaking to them. This is where integrating technology such as automatic number identification (ANI) validation and ANI matching, which can help agents quickly verify a caller’s identity (otherwise known as authentication) and provide a full view of their account information, can move a business closer to delivering on these expectations.

While this seems reasonable enough, commonly used authentication methods like knowledge-based questions and one-time passwords that require consumers to be active participants in the authentication process actually end up hindering the customer experience more than they help it. Knowing that younger generations want both personalized human contact as well as fast and convenient experiences, credit unions should consider prioritizing the balancing of high-tech solutions and high-touch interactions.

Looking Ahead

As the urgency to convert younger generations into loyal members increases, credit unions should aim to meet these individuals in their moment. As Gen Z consumers leverage the current financial climate, credit unions have been presented an opportunity. Those that can safely deliver a faster, smoother and more personal experience could finally win over younger consumers and keep them for years to come.

Tim Prugar is Vice President of Operations for fraud prevention company Next Caller, a Pindrop Company, based in New York, N.Y.