As you’re well aware, banking customers now have more choices than they ever have. They also have greater access to a vast amount of data and information, which makes shopping for a “better” banking experience about as easy as it can get. This means competition is fierce, for both consumers’ attention and their business. … and not just from traditional financial institutions, either. Today, a community bank’s competition comes from the big nationals, regionals, other community banks, well-funded, loosely-regulated non-banks … the list gets longer every day.
CX is king
If any of us in the banking industry has learned anything, especially since the pandemic, customer experience (CX) is king, and that a financial institution’s survival depends on its ability to meet the sky-high service expectations of the marketplace. The segments of that marketplace that are particularly critical, not just to banks but all businesses, are the Millennials and GenZs. Why? Together they comprise 1) nearly 50% of the U.S. population, and 2) they are the banking consumers of the present AND future, those individuals who are just beginning their financial journeys.
So, segmentation and personalization are, or at least should be, at the top of any community bank’s marketing efforts. The key takeaway is this: When it comes to bank marketing, one size does not fit all. Especially when you consider that 70% of people rate personalization as “highly important” to their banking experience.1
Just how seriously do those individuals take their bank’s customer experience? Pretty seriously. Couple that with the current economic environment and you have nearly three quarters of banking Americans exploring ways to cut expenses, including a bank’s fees and recurring charges. Sixty-three percent are looking for ways to balance saving time and saving money. What does this mean for a community bank? It means people want to know their bank will reward their loyalty, help them save money and time, and generally make life easier. In addition to cutting costs, consumers are also looking for help managing their finances. According to a June 2022 survey by Vericast, 44% of respondents say they get their financial advice from friends or family. Only 31% turn to their financial institution for financial advice.2
Here’s an opportunity for the community banks to do what they do best; build upon those trusted relationships and offer financial guidance in the way of workshops, as well as scheduling one-on-one meetings with financial planning specialists.
The up-and coming generations
What happens when these up-and-coming Millennial and Gen Z banking services consumers don’t receive the customer experience they’d like and expect? They “vote with their feet,” as the saying goes. In fact, they don’t even need to use their feet! They can now switch banks in less than five minutes using nothing more than a mobile app. And Millennials and Generation Z have the greatest tendency to make the jump from one institution to another, with 53% of millennials and 42% of Gen Z changing financial institutions in the past two years.3
What you need to know about Gen Z
For starters, Gen Z’ers, contrary to popular belief, don’t spend every waking hour on TikTok and texting. They actually like to mix a bit of analog (or what some are calling “vintage” technology, such as record players, flip phones, and disposable cameras) in with their digital lives.
To reach Gen Z with your financial institution’s offers, consider focusing on deposits, BNPL, and card incentives. This banking consumer wants to build their savings, but roughly only 25% of Gen Z surveyed indicated they had saved $1,000 or more for unexpected expenses or bills.3 To help Gen Z customers, and potential customers, meet their financial goals, community banks would do well to provide easily accessed education tools through the web, social media and apps.
What you need to know about Millennials
Members of this generation see how other industries use tech and communication to improve the customer experience and expect the same from their financial institution. They’re in a busy stage of life, too, and here is where CX technologies and practices can come into play. Text messaged offers, auto controls and convenience are all critical as they balance the demands of time, work/ life responsibilities and resources. Millennials want offers and information on how you can help them. Establish your position as a trusted advisor to save them money on the things they want and need to build loyalty. Most importantly, invest in this relationship now because as they get older, while they will also be exploring more and more financial services and products, they will also become less receptive to financial institution messages.
Bank Marketing Center
Here at bankmarketingcenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals — that will help you build trust, relationships, and revenue. Like these ads on our portal that you can use to market to younger, digitally savvy customers.
To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com. You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts.
1,2Capco, Capco Intelligence: Insights for Investments to Modernize Digital Banking.
3The Center for Generational Kinetics, The State of Gen Z 2021-2022, October 2021.