Mobile-First, Hyper-Personalized and Locally Loyal: Three Steps to Gen Z Relevancy

Even though half of them are still minors, reaching the age group of Americans known as Generation Z (born 1997-2012) is already a major priority for community financial institutions (CFIs). These “mobile natives,” who make up over 20% of the total population, are projected to have an annual spend of over $12.6 trillion by 2030 – and virtually every one of those dollars is going to pass through a deposit account, credit card, or consumer loan of some kind. 

Unfortunately, though, acquiring and retaining relationships with these consumers may be harder than with any generation to come before them. Consider these three facts:

1. Their standards are high and very specific, especially when it comes to technology.
2. They have more options than ever before.
3. They’re quite willing to leave if you don’t continuously meet their expectations.

In fact, 37% of Gen Z credit union members said they were likely to switch FIs within the next year – more than double the cross-generational average! 

According to research, this propensity to switch FIs is directly connected to two deeply felt needs that too often go unmet: the needs for digital functionality and psychological financial security. Any time digital services fail (or are perceived to) – whether it be slow apps, non-transparent fees, or confusing jargon – Gen Z sees it not as a technology problem, but as a breaking of emotional trust, confirming their skepticism about traditional institutions and justifying a switch. And where do they go? Could be to a megabank or a neobank, but probably NOT to another CFI.

What Can We Do?

As they say, the first step is admitting that you have a problem, so that’s where you should start. Gen Z Churn should become a priority KPI for every executive team, because you simply can’t afford to ignore this. 

Beyond tracking it, though, what can you do to fix it? Here are some steps we highly recommend:

• Eliminate Friction: Every part of a relationship with you – finding you online, opening an account, applying for a loan, paying a bill, resolving a problem – has to be easy, and has to be mobile-first. For Gen Z, if it’s not in your app, it doesn’t exist.
• Apply Your (Artificial) Intelligence: More than any other generational cohort, Gen Z wants, no, needs, financial advice and education. But it can’t be boilerplate; it has to be hyper-personalized, addressing real needs in real time. Use AI-powered data analysis and mobile engagement tools (like Pulsate’s Platform) to become a “Digital Money Mentor,” delivering contextually relevant tips and alerts through your mobile channels. It’s the best possible way to gain their trust.
• Exercise Your Advantage: Unlike your megabank and neobank competitors, you are community-based, and that gives you a leg up with this socially- and environmentally-aware generation. Make the most of that! Whatever you’re doing in your community, make sure they know about it. Gen Z is “Locally Loyal,” so show them you are as well. 

It’s Hard But Not Hopeless

Winning the battle to bank tech-savvy, financially naive Gen Z is unlike any challenge most FIs have ever faced – and having deep-pocketed megabanks and neobanks to contend with doesn’t help. But by focusing on the things they find important, you can win their trust – and with their trust, you’ll win their loyalty. 

Pulsate provides the tools to reach Gen Z, build trust, and enhance your relationship advantage! Book a demo.