Business & Finance

Why Gen Z and Millennials Switch Banks? How to Attract Them to Yours?

Why Gen Z and Millennials Switch Banks? How to Attract Them to Yours?
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If you’d like to get more Gen Z and millennials to do business with your financial institution, below are some of the important findings you should know.

The world has been experiencing rapid technological leaps over the past few years, making digital services more accessible and more widespread than ever before. In fact, entire generations have been shaped by this digital revolution. Today, most young people—particularly those that belong to the millennial and generation Z demographics—are tech-savvy and use digital tools in almost every facet of their daily lives. Whether it’s communicating with their loved ones through social media or ordering groceries online, younger generations have created their way of life using technology. 

Most industries have adopted digital systems to accommodate the needs of millennials, and Gen Z. The finance industry is no exception, as many banks and other financial institutions have branched out into online platforms. Popular banks even use robust banking software that allow customers to open accounts, accomplish transactions, and manage their money on any device. The presence of a digital banking platform has often been enough to convince many younger people to switch banks. 

However, if you want to attract Gen Zers and millennials to your bank, providing digital services is only one part of the process—albeit an important one. Other factors like brand reputation, helpful financial advice, and better banking rewards also play a large role in attracting young customers. Gen Zers and millennials are not only looking for convenient digital solutions, but they also desire enriching banking experiences that can help them build and secure their finances in today’s modern world. 

4 Key Reasons Why Gen Z and Millennials Switch Banks and How to Attract Them to Yours:

1. The Bank’s Reputation

Recent reports have shown that younger people prioritize trust when it comes to choosing a financial partner. Furthermore, the same surveys have found that millennials and Gen Z are more likely to trust the brands that they know. Many young people are understandably cautious about where they put their money. After all, it’s difficult to entrust one’s finances to an unfamiliar party. This is why brand affinity is essential in attracting more millennials and Gen Z. 

According to studies, most young people still prefer entrusting their most important finances to reputable and traditional banks rather than third-party payment providers. This gives your bank a competitive edge that can be maximized to gain more clients. To do this, you should improve your operational and security systems on all platforms—both digital and physical. This way, you’ll be able to showcase your bank’s ability to safeguard the finances of younger customers

2. Access to Convenient Digital Banking

In a digitally connected world, attracting millennials and Gen Zers to your bank means having to adopt digital platforms and making your multitude of services available through those platforms. Younger generations often find it easier and more convenient to navigate a virtual landscape since most of them are either digital pioneers or digital natives, and they’re already accustomed to it.

It also saves them the trouble of sorting through confusing paperwork and waiting in long queues at brick-and-mortar branches. Surveys have shown that younger people would much rather open bank accounts, make payments and transfers, and take up their mortgage loans online or through digital channels. It became especially true during the COVID-19 pandemic, as limited physical interactions meant that more people had to perform many of their daily transactions online. 

Additionally, millennials and Gen Z prefer banks that provide digital tools to help them better manage their finances. These include tools like calculators, budget trackers, digital personal assistants, and financial analytics, all of which can be included in your banking software for a streamlined and elevated user experience.

See Also: How Do You Develop a Financial App?

3. Access to Financial Advice 

Most people under the age of 35 have seen or lived through various economic crises while growing up. Hence, many millennials and Gen Zers have a strong desire to develop financial literacy and achieve financial independence. Surveys have shown that younger generations are eager to gain advice from finance professionals, whether it’s in the form of digital content or face-to-face consultations.

It means that they’re more likely to take advantage of a bank’s services if they’re provided with financial advice that caters to their specific circumstances and needs. The younger generations’ desire for professional advice not only determines their choice of bank provider but also their lending and investment activities.

Besides physical consultations, younger customers also appreciate online content in the form of blog posts, videos, or infographics that share helpful advice and money management strategies. For your bank to be a cut above the rest, it’s essential to make the language of finance more understandable and accessible for younger clients.

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4. Better Rewards for Reaching Financial Milestones

Given how millennials and Gen Zers prioritize financial stability and security, it’s no surprise that they’re drawn to offers that help them protect and grow their capital. Providing financial incentives is a simple and effective way to attract younger generations to open an account with your bank.

Surveys show that millennials and Gen Z will readily switch banks if offered better interest rates, plans, and rewards. Better rewards were a primary motivator for younger people to switch banks, with interest rates being a secondary motivator. So, if you want to stand out amongst the competition, you’ll need to prove that younger generations have a lot to gain from your services.

See Also: Can I Buy Bitcoin in the USA without Card Verification?

Conclusion

Effectively catering to a younger crowd takes more than just digitizing and digitalizing your services, though these are definitely important factors. Attracting young people also requires a holistic approach that combines technology with useful products, efficient service, and compelling incentives or rewards. The most important part of this process is taking the time to understand your target customer base and their needs, preparing the right solutions to address them, and letting them know that you are capable of serving them.

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