Gaining trust and developing relationships: A note to financial institutions from today’s youth
When banks and credit unions look to engage with younger generations, they need to understand one thing. It is all about technology.
From desktop computers to the evolution of the smartphone, we watched the technology revolution unfold. We learned to progressively use tech tools in our youth and carried the habit into adulthood.
As a result, we want to manage our finances differently than our parents, and we want to bank with a financial institution that can meet our unique needs.
What younger generations look for in a financial institution
When it comes to financial literacy, younger generations fall at the low end of the scale. Part of this can simply be attributed to youth. We have less experience dealing with financial matters and are not as knowledgeable as older generations.
Many of us begin relationships with financial institutions by using digital tools that help us improve our money management skills. These include basic calculators that perform simple functions, such as showing us how our savings will grow over time or how much we’ll pay on a loan.
While tools like these cover the basics, emerging technology is pushing the envelope on digital advising. Conversational banking, for instance, provides 24/7 access to individualized guidance on detailed financial matters. As younger generations engage with tools like these, they develop relationships with the bank or credit union.
However, before we open an account or take out a loan, we need to be sure that the financial institution is a fit for the way we want to bank. Millennials and GenZers perform a large portion of our daily tasks on mobile devices, and this includes managing our finances.
Younger generations use a wide variety of third-party apps to manage money as well. It is not uncommon to see a Millennial or GenZer using Mint to budget funds, Venmo to make payments or transfer cash, and even Stash for micro investments.
However, we have a not-so-secret secret. We would much prefer to unify these services under one umbrella.
Since many banks and credit unions do not offer the full range of services that we want and need, younger generations are turning to neo banks. Neo banks, such as Revolut, deliver the digital-first access to banking services that Millennials and GenZers crave.
Canadian challenger, Koho, even adds personal finance management services, foreign exchange tools and cash back programs to their traditional suite of banking services. For the youngest members of our ranks, Jassby combines financial literacy and budget control with banking services to guide teens and young adults on saving, spending and investing.
Taking notes from new market entrants like these could provide financial institutions with the right insight to engage with younger generations. Remember, the youth of today are tomorrow’s most profitable banking customers, and gaining their business is going to take some digital savvy.
Discover more in the Redefining Finance series