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Meet your new customers: Gen Z

The future of your financial institution rests gently in the palms of Generation Z. Yes, they’re young. But they’re the second-largest generation in the U.S. so it’s not too early to get acquainted with them.

Gen Z includes anyone born after 1997, meaning the eldest are a mere 23 years old. And while you may be thinking your concerns are best centered on wizened millennials who have careers, businesses and families, know that Gen Z already represents 40 percent of consumer purchasing power. Imagine the giant influence they will have as they start entering adulthood in droves.

If you’re like most community banks and credit unions, the majority of your customers are over the age of 52, so get ready for a major shift in how you do business.

A glimpse into their world

For Gen Z, online is everything. They have never known a world without smartphones or social media.

Until now, maybe you’ve hesitated to move all of your services online. Maybe you’ve questioned the need for a fully digital approach. It’s time to reset that thinking. Gen Z won’t have the patience for any phone or in-person banking services. If you’re not offering a service online, they will seek someone that does. 

The blurring of banking and high tech

Older generations have discovered and gradually become comfortable with non-traditional financial providers that have emerged from the high tech industry – like PayPal, Apple Pay and Google Pay. But for Gen Z, the blurred lines between the banking and technology sectors is normal. Old news, even. Consider that one quarter of Gen Z has used a budgeting app compared to just 7% who use a credit union.

They will have no hang-ups about choosing flashy new entrants for niche financial services if they don’t find what they need at a traditional bank. 

A generation of entrepreneurs

Gen Z is projected to be highly entrepreneurial. This is partly due to complex socio-economic circumstances, like COVID-19 which is causing a surge in unemployment in traditional jobs, particularly for Gen Z who are newcomers to the workplace. 

The unfavourable job market will likely push Gen Z to birth start-up companies at never-before-seen rates. So credit unions and banks need to be ready to provide the services they need - including international payment services – to kick-start and grow small businesses. 

The opportunity is now

Gen Z customers will need banks and credit unions to be fast-moving, agile and above all, online. Now is the time to start looking at your financial institution through a Gen Z lens. This huge generation isn’t going to slow down for anyone.