How to Engage & Retain Gen Z Members
BAI's recent research on generational banking attitudes and expectations reveals insights into the trends and interests of Gen Z.
Now in their late teens or early 20s, many members of Gen Z are launching their careers and becoming financially independent. Sixty-four percent of Gen Zers are now financially independent, up 5% from the previous year. To drive growth and engage this digital generation, building an innovative and accessible banking experience is more important than ever.
BAI recently released research on the trends and interests of Gen Z. “A Look at Gen Z Banking Habits and Attitudes” provides insights to understand generational banking attitudes and expectations. The research uncovered that, unlike older age groups, Gen Z does not feel as tethered to traditional financial service providers and is less likely to bank with only one financial services organization.
Knowing what is most important to Gen Z and which innovations to focus on is crucial to staying competitive and top of mind for Gen Z members. As Gen Zers enter adulthood and become financially independent, credit unions can take steps to grab their attention and gain their loyalty.
Grab Their Attention
Financial services organizations can grab the attention of Gen Zers by providing digital capabilities that meet their digital banking needs and expectations.
BAI identified the top three digital capabilities that would improve a banking app’s usability, according to Gen Z:
- Ability to turn on/off credit cards;
- Online account opening; and
- Faster payments.
Gen Z members are digital natives who look for digital capabilities to improve their banking experience. To attract this generation, it is crucial to understand what capabilities they find attractive.
It’s also important to note that the most preferred way to open a new account for this generation is online, rather than visiting a branch. Having a strong digital account opening process is also important to attract Gen Z members.
Gain Their Loyalty
When asked about the likelihood of remaining at their primary financial services organization one year from now, Gen Z averaged 6.7 on a scale from 1 to 10, 10 being most likely. Aligning your credit union’s goals and capabilities to the needs of this generation is important in improving this number and increasing retention rates.
Gen Z is also concerned about Diversity, Equity and Inclusion (DEI) as well as Environmental, Social and Governance (ESG). This generation values organizations that prioritize these issues. They have high expectations, and credit unions risk losing their Gen Z members if they don’t demonstrate commitment to these areas.
Among the key findings, BAI found that:
- Fifty-eight percent of Gen Zers would switch financial services organizations for one more committed to DEI; and
- Fifty-six percent of Gen Zers would switch financial services organizations for one more committed to ESG.
With the highest likelihood of switching to a provider that prioritizes DEI and ESG, compared to other generations, Gen Z is also the least likely to feel their current financial services organization adequately supports these issues.
The goal of this generational research is to provide insights so leaders can adapt to change, prepare for the future, and better support Gen Z. The data reveals that Gen Z consumers are financially diverse, digital natives who seek a financial services organization that can meet their digital needs as well as align with their values. Prioritizing both areas will help you gain consideration with this generation as their banking needs continue to grow.
Karl Dahlgren Managing Director BAI Chicago