Millennials have been joined by adult members of Generation Z in boosting the importance of digital-first consumers who are driving growth for financial institutions.
The acceleration of digital-first banking has so far favored larger banks, but smaller banks and credit unions must pay attention to the generations currently entering the consumer base. The current definition of Generation Z are young adults between 18 and 24 years old, while Millennials are ranging from 25 to 39 years.
Many smaller banks and credit unions deal with a graying customer base and struggle to renew their membership. Even for growing financial institutions, this is a critical generation that will define winners and losers in banking for the next two decades or more. The key to understanding digital natives as customers is to keep in mind that online experiences must be seamless, or they are likely to abandon a platform.
For instance, Generation Z, which fueled the rise of the TikTok app, are rapidly redefining social engagement and expect highly-engaging user experiences. Millennials and Gen Zers will be dominant segments in banking for years to come, making it essential for financial institutions to get the digital experience right to compete and win.
Millennials number over 83 million in the United States, and 97% use mobile banking with 79% doing most financial tasks online or on mobile apps. Together with the growing cohort Generation Z adults, who are even more likely to engage with finance online or on apps, they will be dominant segments in banking for years to come.
Digital native generations are shaping the future of banking, and rightfully so, given they represent tremendous current and future value. Spending power of millennials is estimated at over $3 trillion and Gen Z is $143 billion.
For banking and payments providers, attracting these customers while they're still young could lead to lucrative relationships throughout their lives, with value increasing as they age, earn more money, and expand the number of financial products they engage with.
Most Gen Zers haven't started using financial products beyond a bank account, which makes them a ripe opportunity for players in the space. Understanding what makes these generations tick is critical for marketers, strategists, and developers looking to cater to these younger customers and build out a suite of products, tools, and services that they'll want to adopt.
Contact us to learn more about how DYCSI can help you become a fully digital Financial Institution with the best system and tools.
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