Few could dispute that Millennials captured many banks and credit unions like deer in the headlights. However, some financial institutions today believe they learned their lesson, and they are prepared for Gen Z.
How so? If you Superglue a smartphone into your own hand, and construct your daily life around social networking, you might get an idea of what’s important to a Gen Z’er. They reside in a world in which, for them, social media is an integral part of life, not a just a distraction. And life experienced through the internet and the ever-present mobile device blends into bodily being.
These are among the findings from new study published by The Center for Generational Kinetics. Born between 1996 and 2005, Gen Z customers say they’d rather graduate with less debt than Millennials before them, even if it means acquiring a diploma from less prestigious colleges. Many are already worrying about saving for retirement. They take more pride in saving than in spending, and also will bring their business to financial services recommended by a new generation of social influencers.
Careful With Money
The center’s State of Gen Z study points out that while Millennials and Gen Z’ers lived through a number of the exact same formative moments, the impact on each generation was different.
Gen Z’ers were too young to feel the financial burdens of The Great Recession of 2007, but still observed how adults struggled. They watched their parents have to foreclose on their houses, and watched young adults struggle with enormous student debt. Witnessing the fallout of rough financial times has taught Generation Z how to prepare for such economic downturns.
As a result, Gen Z is more fiscally conservative than the Millennial generation before them. They lean towards thrift shopping and sales than shopping for expensive name-brands. While 38% of this cohort are still getting money from parents, one in four has a part-time job and an almost equivalent amount take on odd jobs or temporary work. Normally kids invest their hard-won bucks with wild abandon. Not true with Gen Z.
Research shows that Gen Z knows that they will need to work harder and more, that they will need to save their cash, they will need to be responsible with credit and the way they feel about debt, and that they truly want to be self-reliant. And the fact remains that Gen Z customers could end up paying money for more items, or making bigger down payments, which might affect consumer lending and credit card use.
Gen Z: The Mobile Generation
The analysis found that 95% of Gen Z users now have a smartphone. Having one’s own smartphone and engaging in several different communication flows is developing a generation of complete electronic immersion. The smartphone has become an extension of a Gen Z’er’s physical being. From mere entertainment to actual planning and business, they use their phones constantly.
The analysis shows that Gen Z isn’t simply constantly connected, but also always connecting. 65% of Gen Z’ers from the study stated they were on their mobile devices after midnight several nights out of the week. In fact, they spend a reportedly third more time on their mobile devices than Millennials.
Apps are for Saving Money
You are not likely to see Gen Z showing up often with jars or even piggy banks filled with change. For starters, more and more of their transactions are cashless, through Venmo, PayPal and, more increasingly, with Zelle. The Z generation is no longer logging in through desktop computers to access their bank accounts, they are shifting to managing their finances through their phones. Banks and credit unions ought to be offering savings programs targeted on the mobile-engaged generation.
Generation Z isn’t as easily influenced by recommendations on banking from their parents or family either. They are more likely to do their own research online to find who is offering the best rates, or take the advice of a social media personality that recommends it.
Social Media is a Dominant Influence
Before Generation Z, having an online presence through social media was optional. Nowadays, the overwhelming majority of Generation Z are on social media of some sort. That means financial service providers need to think about getting accounts set up on the social media networks in which Gen Z resides. The study concludes that social media will be influential on this generation for years to come.
In reality, Gen Z’ers of different demographics have particular social media preferences. Sometimes these preferences are based on age or gender. But most impactful to the wide range of Gen Z’ers is YouTube. According to the study, Gen Z trusts ads seen on YouTube over any other king of advertising, including radio, print, and TV.
The Power of Social Influence
A vital facet for Gen Z’ers is the part of social media influencers their product preferences and choices. These influencers, like popular YouTube creators like personality Jenna Marbles or gamer PewDiePie, carry more authority than Hollywood actors for Gen Z’ers. What is also important is the idea of social validation, where users prove their trustworthiness based on follower or subscriber count. These high authority social influencers may not have the credentials like academic degrees or career experience to warrant that generation’s unexamined trust, but Gen Z’ers tend to go to these channels nevertheless. Inside this sphere, experience might have a back seat—it is the range of followers dictates authenticity.
If financial institutions are looking to reach Gen Z, they must explore influencer campaigns. Finding a right influencer can be a challenge. Marketers must look for someone who can relate to the product or service and someone who will produce many videos or articles that speaks to their Gen Z audience. The influencers no longer has to be a successful athlete or musician to be a suitable spokesperson for your institution. It could be a local banker with a huge social following.
When the moment presents itself, do not miss the opportunity to connect. Make sure your websites are optimized for mobile browsing and the site speed is acceptable, because small obstacles like load time could make a Gen Z’er lose interest in a second.
Street Cred: Online Reviews Steer Gen Z’s Choices
The very nature of Gen Z’s internet connectedness means they value the opinions and recommendations of influencers and online reviews over their families’ suggestions. Not to say friends and family are an important part of their lives, but when it comes to purchasing decisions, the perspective of anonymous and complete strangers also has a powerful pull.
This is observed in the many ways online users can get reviews of businesses and organizations on the internet. Gen Z women seek input from testimonials especially intensely.
To properly reach Gen Z, monitor the following spaces thoroughly::
Google Reviews: This is a choice spot to monitor reviews and react to them. Ask customers who’ve had wonderful experiences with your business to submit Google reviews.
Yelp Reviews: Gen Z respects Yelp, therefore keep up with what is being said about your organization, reacting to the unfavorable ones, and also working to promote the worth of your offerings.
Facebook: Millennials and Gen X prefer Facebook over Gen Z, but it is very good to track Facebook feedback to comprehend your reputational effect when Gen Z Googles you.
Glass Door: Gen Z considers that the way you treat your employees ultimately influences how you treat customers.
Three Steps To Take on Gen Z
Here is how financial businesses can enhance their institution’s Gen Z outreach with these measures:
1. Show your app to Gen Z. Ask a group who have never noticed your app interact with it. Watch them as they attempt to navigate it. You may learn more about five to ten minutes seeing a 20-something do this than anything else.
2. Have Gen Z assess your online reviews and testimonials. What do they think about what they see? At times you’ll get the things you are most sensitive or concerned about aren’t a problem to them. But something else may jump out. Alternatively, they may suggest improved ways your organization could have responded to negative feedback.
3. Request Gen Z customers to visit your branches. Ask them what you can do this will make branches a much better experience for them.