New banking uses for a new generation?
13.07.2017 | Innovation
They’re under 20 years old, but have already generated a lot of buzz. They are Generation Z, and they’re shaking up habits in every consumer sector. So what is the Gen Z lifestyle and how are banks reinventing their models to serve these new consumers?
What is Generation Z?
What exactly do we mean by Generation Z? The moniker was first selected and promoted in 2012 by USA Today to refer to people born after 1995, following Generation Y who are now between 20-35 years old. Gen Z currently encompasses 35% of the world population, or almost 2.5 billion people.
Often called “digital natives,” because they have lived exclusively within an ultra-connected world, or “linksters,” as no previous generation has spent more time networking online.
Often called “digital natives” because they have lived exclusively within an ultra-connected world
But what is their most distinctive trait? They are connected at all times for everything they do, from meeting new people, creating relationships, to education, training, news, and shopping. For Gen Z, Facebook is old hat. They spend most of their time on Snapchat and Instagram. Consisting entirely in photos and videos, these two social networks are also more selective and more community based.
Greater financial difficulties than their parents
Young people in Gen Z have a harder time entering the workforce than previous generations. But instead of sinking the entire generation into a state of depression, it has galvanized them to action. This generation is not held down by their lack of security. Instead, they have integrated it into their outlook on life: "they know that they can only count on themselves, that they can never rest on their laurels, and that they must constantly reinvent themselves."
Banks lend their support by developing offers adapted to Gen Z’s longer and more difficult entry into working life. BNP Paribas notably provides comprehensive accompaniment for students and those just entering the workforce, through initiatives like “young worker loans” to finance projects for people under 29, a loan of 1 Euro a day to finance a driver’s license, and attractive movie ticket deals with "We Love Cinema."
Mobility as a way of life
“Digital natives” are “mobile first.” The mobile web is a window on the world, as well as a tool for managing daily tasks. Gen Z wants to manage all of their activities in just a few clicks, whether that means checking social media, chatting with friends, buying clothes or transferring money while on public transit. That means a mobile app is a given!
To attract these consumers, banks have developed a wide range of digitalized services on web and mobile to help Gen Z carry out simple banking operations remotely, like transferring money or checking account balances.
Mobile banks and neobanks are two offers tailored to this new trend. Key benefits include a simple subscription process, fewer documents to sign up, and permanent access to essential banking services. Hello Bank! is a 100% digital bank dedicated to web users in search of speed and simplicity.
That is also true of Compte Nickel, a bank with no physical branches, offering accounts accessible to everyone that can be opened at a shop (such as a newspaper stand) in just five minutes!
A demand for instant services
Gen Z are even more pressed for time than their elders in Gen Y: they need fast responses. This explains their marked reticence with regard to long and fastidious processes and excessive paperwork.
Banks are therefore developing instant help services, available 24-hours a day both online and by phone. For example, BNP Paribas opened a help desk account on Twitter, one of the most popular social media platforms among Gen Z. The account already has 12,000 followers and 19,000 tweets.
Dematerialized payment is another application that eliminates the need to enter a pin code. Contactless cards and mobile payment options are an attractive option for Gen Z, allowing purchases to be made by scanning a smartphone at the register. Fueled by mobile, simplicity is the golden rule once again. It’s up to banks to ensure security in the back office!
Human after all?
In an increasingly digitalized world, will Gen Z be more inclined to use Artificial Intelligence and robots to access financial services? Of course! They already use chatbots, robots that respond automatically on instant messaging platforms.
But that does not mean that the classic branch appointment is going out of fashion. Far from it: according to an Accenture study from 2016, this age group accounts for more meetings with branch representatives than any other generation. Just as Gen Z continues to shop in physical stores, it also still views the physical bank as a place for discussion and expertise. Now the goal for banks is to leverage technology to offer an enriched experience in physical branches.
Generation Z still has plenty of surprises in store… Just like Generation Y before them, the new consumption methods of these digital natives, their new aspirations and the economic context in which they grew up will force banks to reinvent their models to continue meeting consumer expectations. From support for their personal projects to developing hyperconnected and mobile offers, Gen Z has already set the tone for the future of banking.