Stop Letting your Oldest Gen Z Members be an Afterthought in your Credit Union's Digital Growth Strategy: 5 Tips to Acquire Digital Natives
In the age of information, Gen Z members aren’t satisfied with the status quo of banking. They crave innovation and simplicity. And, probably most importantly, they’re hungry for knowledge, as long as it’s delivered to them fast.
Gen Z, the oldest of whom will celebrate their 25th birthdays next year, have grown up skeptical of traditional institutions (like college). And, they’re wary of taking on debt.
Yet, these young adults already have an estimated purchasing power of $143 billion. And, while Millennials are the largest demographic in the U.S., according to a Bloomberg analysis, Gen Z is expected to edge past them globally this year by about a half percent.
And, according to GlobalWebIndex, 33% of the world’s Gen Zers are already working, full-time, part-time, or freelance. Some 60% have a savings account and 54% own a checking account, according to Pew Research. They’re spending big money, and they’re looking to trustworthy institutions to bank with.
Enter the credit union.
Credit unions have been dubbed the most trustworthy, easiest-to-use financial service. What’s more, credit unions have topped the charts when it comes to customer experience for the last eight years, according to Temkin.
So long as credit unions can continue on the trend toward digital transformation, they’ll be in a prime position to cater to the next generation.
Here are five tips to acquire new Gen Z members:
1. Meet them where they are
In a digital scene as ephemeral as Snapchat, one where 280 characters equals fully formed thought processes, the idea of putting your credit union online so you’re findable is tired and incomplete. Gen Zers are looking for more (and they’re looking for it to happen faster).
Millennials grew up using technology, but Gen Zers have never known a world that wasn’t fully connected. They’re looking to technology to solve (almost) all of their problems. And, they’re looking to find the most innovative financial institutes to help them build up their finances and reach their lifetime milestones, like buying a house or starting a family.
Gen Zers expect their credit union to have digital solutions that are intuitive, streamlined and, of course, seamlessly omnichannel. (We know a thing or two about that). Three in every five Gen Zers say they’ll leave an app or website that’s too hard to navigate or too slow to load.
Make sure your credit union’s platforms are user-friendly, secure, automated and optimized for mobile.
2. Give them immediate payment options
Gen Zers aren’t the best at making payments on time. According to research out of ACI Worldwide, more than half (53%) of Gen Zers said they had paid a bill late at least once in the last year.
But, at least most of the time, it’s not because they don’t have the money. In fact, they’re one of the most fiscally conservative generations we’ve seen in recent history. Instead, they’re missing payments because they’re either confused or, more simply, they forget.
The folks in Gen Z just don’t understand bills. (Join the club.) Around 30% of them find their bills to be confusing, compared to the 22% average for Americans in all age groups. They’re also the most anxious age group when it comes to paying their bills, which manifests into calls to a contact center and, of course, late payments.
To help, create a strategy that focuses on making it easier, faster, and less confusing to make an immediate mobile payment. Try integrating loan products with text messaging. “Gen Z really will resonate with things like, ‘Hey, your auto loan at you credit union is due tomorrow. Do you want to text back ‘yes’ to pay that?’” said ACI Worldwide Solution Marketing Manager Phil Spradlin.
They want to make the payment when you’re reaching out to tell them the payment is due, Spradlin added. It’s not easy to grab their attention. When you do, you need to give them a tool in that moment so they can go ahead and act on your request.
Are you managing Gen Z workers? Here’s a guide to coaching your MSRs for a better member experience.
3. Use technology that “just works” for your members
Digital natives think all of your channels are one integrated experience, according to CUNA Mutual Group. Because of this omni-digital lens, they’re expecting to conduct a transaction completely digitally. And, they expect they’ll be able to seamlessly move between channels without having to re-enter data or restart a process. Gen Zers manage almost every aspect of their lives on their mobile devices through apps, Alexa, Apple watches, smart fridges and the like. They haven’t even considered that something as important as their banking experience wouldn’t fit into this model.
They expect to be able to complete a transaction with you, either talking to an MSR or not, at any time, day or night. And, if they’re reaching out via a digital channel, they’re expecting it to work. And they’ll pay heavily to make sure it does, according to research from the Center for Generational Kinetics.
If something doesn’t work with your system, Gen Z members want you to fix it. But they’re unique in that they’re open to paying for such help.
Research shows that Gen Z members are open to paying between $50 and $100 a month for a service that would set up, monitor, or repair the things that matter most to them. That suggests that they may be willing to pay for, say an app that handles financial management and planning.
4. Share as much information with them as possible – fast.
Growing up in a world where the internet has never not been a “thing” has led Gen Zers to crave constant knowledge. They’re fiscally savvy with 60% of them already saving. But they want to learn how to stock up for retirement or for their next big purchase (because remember, they’re cautious about debt).
But here’s the catch: If you can’t give them the knowledge they want and need in seconds, they’re going to bounce (literally). They’ll leave your website or app and find someone who will give them a steaming hot cup of financial know-how.
Give them tips on bill management and develop solutions and a member experience that’s focused on ease of use. Almost 80% of Gen Z shows signs of emotional distress when they’re kept away from their personal electronic devices. But, less than 20% of companies format their bills for mobile phones. If you don’t give them a way to easily interact (and learn from) you, you’re losing their attention. And their account.
5. Show them you’re passionate about something
The next generation is preparing to buy some of the biggest purchases of their lives – car loans and insurance, student loans, and even mortgages. But they won’t make buying decisions on technology or price alone. They want to know you care about….something.
They want to know you have a mission they can relate to, something that ties you together with your membership base. So, having a purpose that aligns with the people in your community (*cough* the basis of a credit union *cough*) helps your credit union stand out from larger banks or new apps.
Your credit unions have to change internally just as fast as the world around you is moving. The “wait-and-see” method just isn’t going to work for tomorrow’s members.
Want to see more trends to update your credit union? Check out our blog on what to expect in 2020 here.