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Why Wooing Gen Z Helps Banks and Fintechs Win

Why Wooing Gen Z Helps Banks and Fintechs Win

CX trends in banking have changed considerably over the last few years, accelerated by the pandemic. Customer service has become an increasingly important part of this market shift, so much so that financial institutions and digital banking challengers need to think strategically about their customer service function in order to stay competitive.

In fact, 97% of consumers surveyed say that quality of customer service is what matters most to them when choosing where to bank. If a bank or financial services provider wants to retain customers, grow their reputation, and in turn increase revenue, quality customer service must be a high priority.

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This is especially true for Gen Z consumers, 54% of which will drop a brand after a single instance of poor customer service.

The Impact of Gen Z

Born roughly between 1996 and 2010, Gen Z accounts for about 40% of global consumers. For the 68 million-plus Gen Z Americans, about 27 million of them banked digitally at least monthly in 2021, a number expected to reach 45.4 million by 2025. Catering to this generation is therefore critical for financial brands to bolster their long-term competitiveness.

For the first generation to come of age with internet ubiquity, it’s not surprising that 90% of Gen Z’s digital banking interactions are on smartphones. Shopping online, spending time on social media, and growing up amid the rise of the gig economy has shaped their buying behavior and brand expectations. In fact, 65% of Gen Zers say they get purchasing ideas from social media.

At the same time, Gen Z consumer attitudes toward financial health have been shaped by substantial student loan debt and skyrocketing inflation. They care about financial fitness and are seeking advice, but many are looking for it in different places than their parents.

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Again, social media is a major influence. The majority of Gen Z consumers are looking to social media platforms, including Instagram (57%) and TikTok (52%) for financial advice, according to a Credit Karma study. That compares with only 31% who look for the information on their bank’s blog.

Financial services providers have an opportunity to get their budgeting, saving, and credit-building messages to Gen Z through their preferred social media channels, and use those channels to drive consumers back to their banking blog and reinforce those lessons through an interactive mobile app.

Where Gen Z Banking and CX Need to Converge

Catering to their digital-first expectations is a must for banks and fintechs to attract Gen Z consumers. That means your mobile banking app has to be full-featured and built for self-service. The user interface should be intuitive and engaging with vibrant, animated UX customers would expect to find from their favorite brands—TikTok, Snapchat, or Discord. Gen Zers are used to having a wealth of information at their fingertips, and they expect the same level of ease and speed from their financial institutions. They’re not going to wait around for an email response or stay on hold to complete a simple task. Customers should be able to easily update an address, lock or unlock their card, dispute a transaction, pay bills, and transfer funds—or anything else they can do in your online portal—without leaving the mobile app.

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And while seamless mobile banking is essential, it’s not a standalone CX solution. It’s true that Gen Z customers prefer self-service, but 60% also want the ability to reach customer support through their banking app.

Whether that means chatbots, in-app messaging, or ultimately a live agent, Gen Z customers expect your service channels to be integrated and consistent. This usually takes some work on the backend as you might be relying on disparate technology vendors, but it’s worth the investment. The more you can reduce customer effort, the better. For example, if an inquiry escalates to a live agent, the agent should have all the information about the customer’s journey in other channels, so they can solve the problem without asking the customer to repeat themselves. Providing a seamless customer experience that’s easy for customers to navigate is going to engender loyalty across generations.

Capturing the Gen Z Market

Attracting Gen Z consumers starts with an amazing mobile app experience, but it also requires you to focus your features and marketing messages on what matters to them where they are in their financial journeys.

Gen Zers are not necessarily known for their brand loyalty; however, banks and fintechs that can woo them with great CX and continue to adapt to their changing needs could secure customers for life.

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