Gen Z Craves Good Tech From Banks+Credit Unions, Not Neobanks
Updated: 2 days ago
The financial industry has been trying to figure out how to cater to Gen Z and give them the perfect inflection of technology and customer service. But, for the last several years, no one has known whether they even really like traditional banking providers. Recent research, however, highlights that banks and credit unions still claim the upper hand as Gen Z uses cash more than any other generation and favors traditional financial services.
Gen Z Prefers Traditional Banking Services
Almost nine out of ten Gen Z consumers (87%) still prefer traditional banking providers to the competitive neobanks and fintechs who are dominating the news, according to a new study by Marqeta, a fintech payments platform.
“While it is a common belief that Gen Z is digital-only and will bank with whatever app they find most useful, our data shows they currently have a strong preference in opening and having bank accounts with well-established banks,” Marqeta’s report reads.
Ian Johnson, SVP of Marqeta’s Europe group, said in a statement he thinks Gen Z may even be yards ahead of previous generations in financial maturity.
Although challenger banks are slowly pulling in more consumers — expected to top 20.2 million users by the end of 2021 — only one in ten (12%) of Gen Z consumers say they are banking with neobanks, like Monzo and Revolut, in any capacity. Of these, only 4% actually use challenger banks exclusively and the other 8% say they bank with both traditional players and neobanks. (The survey was conducted in the U.K., where neobanks are more established than in the U.S.)
80% of Gen Z Use Cash Weekly
Marqeta also found in its research 80% of Gen Z use cash on a weekly basis, which the company suggests is a sign the new kids on the block aren’t ready to forgo their physical wallets.
80% of Gen Z use cash on a weekly basis, which may be a sign the new kids on the block aren’t ready to forgo their physical wallets.
What’s even more interesting is the Zoomer generation already wields a purchasing power exceeding $143 billion, according to Business Insider. And Boston Consulting Group projects that Gen Z spending power will increase by as much as 70% over the next five years.
It’s worth looking into what it takes to really keep them interested.
So, How Do Banks and Credit Unions Cater to Gen Z?
The answer may not be as complicated as you think. A combo of convenient, well-run ATMs to meet cash needs + traditional branches so this younger generation can ask for in-person advice on loans, investments and other products and services.
But what about the ATMs? Financial institutions don't make money on their ATMs...
There is a better way. By partnering with ATM USA, a customized managed services or ATM outsourcing program can:
Reduce operating expenses
Free up staff to spend more time serving account holders. and
Take the machines off the books all together to free up money to spend on innovative financial products that will attract Gen Z.
Set Up a 15 Minute Meeting to Learn
How ATM USA can Save You Time & Money
Craig Helmers, Vice President, Credit Union Channel
Darren Smith, Vice President, Community Bank Channel
Originally published by The Financial Brand