Despite the perceptions of many, Generation Z is not “the new Millennial.” This group of young people born between 1997 – 2012* is a generation uniquely their own.
Those considered Gen Z grew up in a unique set of circumstances including the War on Terror, the stock market and housing crash of 2008, the Obama Administration, and witnessed the decades-long toll of student loan debts.
These real-life lessons have resulted in a cautious generation unlike the ones before. Referred to as the“Throwback Generation,” Gen Z has positioned themselves differently than Millennials by placing a high value on old-fashion values like hard work, frugality, and financial security.
While their values might be old-fashioned, their digital preferences certainly are not. A recent Financial Brand article summarizes their approach: “Technology is important to both Millennial and Gen Z consumers, but for Gen Z that attitude is ‘digital-first,’ not digital as supplement to other channels.” And that makes sense considering a Millennial experience includes, for example, going to a Blockbuster Video to rent a movie then going home to watch it on a DVD player. Meanwhile, the same experience would be approached by a Gen Z-er by streaming a movie through a paid platform to their smartphone, iPad, or one of many personal computers. The idea of a service or experience being tied to a brick-and-mortar branch is foreign to some in this generation.
This up and coming generation has been left largely untapped by banks and credit unions. Yet, creating relationships now before this generation accrues the wealth of their careers can be key to the long-term success of many financial institutions.
While Gen Z is still young (some still in high school) it is important not to underestimate this generation. They are the most digitally literate generation and are quite comfortable within dependently researching major decisions to determine and use differentiators and peer reviews. Co-authors Jeff Fromm and Angie Read share: “Generation Z crowdsources their purchasing decisions and seeks the opinion of their peers before (and after) buying.” This method of thorough online research for decision making includes important financial decisions.
This provides incredible insight to the savvy FI to connect and engage with Gen Z individuals by offering financial literacy guidance, comprehensive digital services, and customer testimonials – resources that this inquisitive generation will use well to find their longtime financial home.
For banks and credit unions who embrace a more traditional marketing approach, connecting with this generation may feel intimidating. However, the key to reaching this demographic is relevant communication that reaches them on the digital channels where they engage. The need of the hour is not to attempt to be exceedingly “trendy.” Instead, simply providing a unified and informative user experience across digital channels for quick, authentic content will capture their attention and prove the value added.
DeepTarget President Jill Homan was featured in a CUtoday article “3 Tips for Reconnecting with Members” in which she states, “It’s no longer a one-size fits all model when it comes to marketing… Truly engaging with your members means knowing which products are best for them when they are at different financial moments in their lives.” Homan continues, “This means marketing different products to different age groups, so the right message reaches the right member at the right time.”
Today, DeepTarget is in use by hundreds of financial institutions to meet this need. DXP from DeepTarget is that innovative tech that provides institutions with the intelligence to target the right individual with the right offer at the right moment. And it provides the automation to do it at scale. FIs have used it to grow their deposits, loans, revenue and customer loyalty. This includes tapping into Gen Z specific communications. After all, this is a generation with massive buying power – $44 billion, to be exact – and still on the ascendant.
*according to Pew Research