Sagar Rajgopal is the president and chief customer officer (CCO) of Ubiquity, a leading outsourcer for disruptive brands.
The banking industry has undergone significant changes over the last few years. While some of these shifts were accelerated by the pandemic, many of the changes were inevitable as more digital natives—particularly Gen Z consumers—started joining and influencing the marketplace. Gen Z consumers, who were born in or after 1997, were projected to account for about 40% of global consumers in 2020, and there could be 42.9 million Gen Z digital banking users by 2025.
Evolving To Embrace Gen Z Consumers
For Gen Z, banking bears little resemblance to their parents’ experiences. One of the biggest differences is where and how financial institutions can reach younger customers. Social media is ingrained in their daily routines for everything from shopping and socializing to working and general search. In fact, a 2017 IBM Institute for Business Value survey found that 74% of Gen Z respondents spent free time online. Another recent study conducted by Qualtrics on behalf of Credit Karma found that more than half of Gen Z and millennials (56%) report intentionally seeking out information or advice about personal finance online or through social media platforms. For Gen Z, those platforms include Instagram (57%) and TikTok (52%). For this generation, it’s clear to me that the appetite to learn about finance is there, but banks should serve this information up in new, innovative ways. Just posting it on your blog may not be enough. Service providers should develop and serve authentic products that offer both value and education and engage this young audience on their platforms of choice.
At the same time, many Gen Zers are still living at home with their parents, so the best way to engage them may actually be to target their parents. Some banks and fintechs target parents with tools geared toward teens that can help them budget and save.
Where Gen Z Banking And CX Needs Converge
In addition to how and where they market their services, banks also need to consider a fresh approach to the overall customer experience.
One must-have service for banks catering to Gen Z is simple self-service. They may not want to have to call someone or wait for an email response to complete simple tasks, like changing an address, reporting a lost or stolen card, or disputing a transaction. Self-service options should be a priority for all customers, but they’re absolute must-haves for this generation.
You can incorporate self-service options into your mobile app, but mobile apps certainly aren’t the end-all solution. In a culture of instant gratification, you should look for other ways to provide quick service and near-instant solutions. If there is something customers can’t do through self-service, then you should make additional support readily available. For example, consider developing a chat bot or offering live agent support, either over the phone or via video call. Although younger generations are largely comfortable communicating through digital channels, they should still have the option to pick up the phone to get a resolution.
The key when adding channels—not just for younger customers, but for all demographics—is to optimize CX and to ensure the technology is integrated in such a way that if an inquiry needs to be escalated to an agent, the agent already knows what the customer’s problem is and what they can do to solve it. Technical integration is only one piece of the puzzle. For example, say your chatbot is integrated with your CRM to attach chat transcripts to the customer’s record. If there’s no easy way for the agent to see the outcome of the interaction and to take over where the chatbot left off, then that integration is not very useful. Achieving a level of brand-defining customer service requires the right combination of people, systems, feedback loops and data analysis to drive optimization. Review not only the customer journey but also the customer data journey and see where there are opportunities to make relevant data easier for either agents or customers to access so they can resolve problems faster.
Banks need agility if they’re going to meet the unique needs and demands of Gen Z customers. The good news is that what will appeal to Gen Z is not likely going to be a turn-off for other demographics. When it comes to products and services, how they are marketed to Gen Z customers will look different, but strengthening CX across the board can do more than just attract the next generation of banking customers—it can also drive loyalty across all consumer categories. Providing more choices for how and where people can get support can result in happier customers, no matter their age.
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