Fresh Insights on Gen Z and Financial Services
Navigating the tumultuous waters of financial security and stability has proven to be an increasingly daunting task for Gen Z. Take Emily, a recent college graduate, for example. Despite landing a promising job in her field, she finds herself grappling with substantial student loan debt, rising living costs, and the lingering impacts of the pandemic on the job market. Balancing rent, utilities, and daily expenses while attempting to save for the future seems like a never-ending struggle.
Emily's story is a common one among her peers, highlighting the unique financial challenges faced by Gen Z as they strive to build a secure and stable future in an ever-changing economic landscape.
One would assume that young people like Emily who, despite her current economic anxiety still has upward mobility potential, would be of strong interest to banks. But recent research published in The Financial Brand Are Gen Zers the Most Dangerous Clients for Banks? argues that Gen Zers could be the riskiest clients for financial institutions right now. From racking up credit card debt to pay for a vacation to engaging in first party fraud, many banks don’t see Zoomers as stable long-term clients.
It’s understandable that banks view this cohort with a weary eye, however, in our view, turning away from the younger generation doesn’t make good business sense. Instead, banks need to develop strategies that help solve the challenges that underlie Gen Z concerns.
Phase 5’s proprietary Gen Z Banking Research Insights report does just that. This report emphasizes the need for developing strong, human relationships with consumers, in some ways countering the industry trend towards increased automation and technology to help manage customer relationships.
This is not to say that technology shouldn’t play a role in dealing with this customer segment. The second part of our report details when and how technology can be adopted in order to best meet the needs of Gen Z and build a positive customer experience and hopefully, life-long profitable relationships.
The key takeaway? Traditional banking methods remain valuable to Gen Z at critical points in their financial journey. While digital channels are accessed for convenience and efficiency, the human touch remains essential when it comes to more complex financial matters.
To learn more about our studies, or to discuss how we can support your organization’s Gen Z engagement strategy specifically, contact us.
Author: Steve Hansen
Steve Hansen, MBA, is the President of Phase 5 US and the leader of the firm's Innovation practice. With almost 2 decades of experience in client-side marketing strategy, market research, and product management, Steve brings a client’s mindset and drive for actionable results to each project. He has extensive experience in capturing the view “from the outside” with a special focus on product and service innovation. Steve is based in Minneapolis, Minnesota.