By: Jessica Duncan, AVP of Insights
Millennials still hold the title as the largest generational group in the U.S., but currently Generation Z makes up one out of every five Americans*, that’s over 69 million individuals. With the youngest members entering their teenage years and the oldest stepping into the workforce, Gen Z is a powerful cohort in the eyes of financial institutions. Their needs along with the preparation to serve the children of the advanced digital age, Generation Alpha, are reshaping the financial services marketplace.
The characteristics of the younger generations are unique. Winning their loyalty requires more than just targeted products —it demands a deeper understanding of their mindset and behaviors. In this article, we explore key marketing strategies tailored to engage and retain the younger generations throughout their financial journey.
Seamless Experiences
Gen Z is not only tech-savvy but they are also the first generation to have grown up with smartphones. As a result, they anticipate a seamless digital experience with their banking partners. Fintechs like Venmo and Cash App have leveraged their digital-first strategies to actively attract younger customers. Their continuous improvement of services demonstrates a commitment to nurturing and retaining these clients for the long haul.
For example, Venmo recently introducing a Venmo checkout button, including for its Teen accounts, that enables Venmo payments directly at checkout in select apps and merchant websites. The fintech also recognizes the preference for a comprehensive digital platform, as highlighted in a recent email that read, “Shop in stores. Spend in apps. Buy Crypto. We’ve come a long way from only being able to Venmo friends.” In the meantime, Cash App launched Pools, a frictionless way for customers to collect funds from others to use to split dinner bills, gifts, or trips.
Financial Education & Tools
Research indicates that younger consumers are enthusiastic about gaining financial knowledge, yet they favor receiving information in bite-sized portions or through game-like experiences. This email from Piedmont Federal Bank employed various strategies that made it notable.
1) Promoted the 50/30/20 Rule, which creates curiosity and is an easy format to retain
2) Described the time-investment for the reader (7 minutes)
3) Included interaction with its savings calculator tool
Financial institutions are increasingly focused on parents, offering products designed to teach children about money management. This shift has given rise to the concept of “family banking” in the marketplace. Traditional banks, credit unions, and fintechs are offering youth-oriented products that include parental controls and in-app money management features. While many companies have built their own products, Greenlight is a well-known partner and provider in this space.
Tip: Topics that can be used to encourage parents to think about banking products for their children include:
-Financial Literacy Month & National Teach Your Child to Save Day (April)
-The benefits of saving early
-Raising teens in a cashless society
-Learn how to protect your kids from online scams/financial fraud
Social Influences
Social media has become the primary platform by which many young Americans gather information, including their views on financial institutions and banking products.
Competiscan has observed an increase in social media content and the growing use of influencers to amplify a brand’s voice among younger generations. SoFi and Chime stand out in this space. Both fintechs have partnered with professional athletes/entertainers and host various blogs or podcasts that talk about finances and success, including those of their own customers. SoFi recently kicked off a campaign featuring singer Kelsea Ballerini, while Chime launched “Mama, I Made It,” an original YouTube series that explores financial success through a new lens: the mom’s point of view.
Tip: You don’t need a deep budget to incorporate social influence into your campaigns. Instead, leverage the psychological concept of Social Proofing. Examples of Social Proof in marketing include testimonials, reviews, ratings or citing the size of the existing customers/users.
Final Thoughts
To effectively engage younger generations, financial institutions must consider adopting a digital-first and personalized strategy. There are numerous ways to connect your approach with messages that can resonate with their values and lifestyles.
*U.S. population share by generation 2024| Statista
https://www.statista.com/statistics/296974/us-population-share-by-generation/