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Winning with Gen Z: Navigating the Future of Digital Banking Solutions

Emily Fagan

Marketing, Alkami

In a world where Generation Z (Gen Z) is becoming increasingly influential, financial institutions are at a critical juncture and must evaluate how digital banking solutions can strengthen relationships with this growing segment of account holders. This demographic, born between 1997 and 2012, is not just large in number but also unique in their needs, behaviors, and expectations.

Alkami’s webinar, “How to Win Long-Term Relationships with Gen Z Account Holders,” dove into the heart of what makes Gen Z tick and how banks and credit unions can evolve to meet their demands using strategy and technology. Here, we’ll explore some of the key insights from the webinar, but to grasp the full depth of our discussion, you’ll want to check out the complete recording.

 

Digital banking solutions are, by nature, primed for a Gen Z audience. Image features a smiling young woman looking at her phone, featuring expenses per month data.
Understanding Gen Z’s Financial Behavior

Gen Z is growing up in a period of significant uncertainty, shaped by economic fluctuations and global challenges. This has resulted in a generation that is financially cautious, digitally savvy, and eager for stability. 

With 70 million strong in the U.S. alone, their influence on the financial services industry is undeniable. 

During our discussion, Director of Research, Insights and Advocacy for EngageFI, Virginia Heyburn said, “This generation represents 40% of U.S. consumers and 25% of the U.S. workforce, making it imperative for every financial institution to pay attention to their needs and wants.”

Gen Z’s interaction with financial institutions is profoundly digital. They seek personalized services, quick responses, and feel a sense of belonging through digital platforms. “Digital trust through great utilization of data demonstrates that we know and understand what their needs are,” remarked Executive Vice President, Chief Operating Officer & Chief Loan Officer for Kennebec Savings Bank, Craig Garofalo. This generation wants more than transactional relationships; they seek engagement that is both meaningful and responsive.

 

Financial Institutions’ Role in Gen Z’s Life

Financial advice is no longer just about saving and investing; it’s about understanding and responding to Gen Z’s unique circumstances. Alkami’s Senior Director of Strategy and Design,

Ty Griffin, pointed out, “With Gen Zers surrendering so much information online, they expect a personal or more intimate response back.” This demographic trusts financial institutions with their finances and looks for advice that aligns with their lifestyle and aspirations.

Showcase your bank or credit union’s Social Responsibility and Community Engagement within your Digital Banking Solutions (online banking or mobile banking app) to appeal to Gen Z account holders. Image features a smiling young man holding a bag of fresh groceries.
Social Responsibility and Community Engagement

Gen Z values social responsibility and community involvement. They prefer to engage with companies that demonstrate an active interest in societal well-being. “This generation, more than any before, wants to do business with companies that are active in their communities,” Virginia Heyburn shared.

It’s a call to action for financial institutions to be digitally excellent and locally engaged.

Digital banking solutions can be super powered by fintech integrations, which appeal to a Gen Z account holder audience. Image features a smiling young woman looking at her phone, featuring income and expenses per month data.
The Fintech Challenge

The rise of fintech solutions poses a significant challenge to traditional banks in attracting Gen Z. Fintechs have been quick to understand and cater to the needs of young people, capturing a growing market share. This underscores the necessity for traditional financial institutions to adapt and innovate to remain relevant.

 

 


 

FAQ About Attracting and Retaining Gen Z Account Holders

How can financial institutions measure their success with Gen Z?

Financial institutions can measure their success with Gen Z by closely monitoring their engagement and adoption rates of digital banking solutions, as well as their satisfaction and trust levels towards the institution. Even prior to the pandemic lockdowns, which fast-tracked the adoption of digital channels for many, the American Banking Association highlighted that Gen Z values technology for solving their problems and expects digital solutions to be intuitive, streamlined, and omnichannel. Trust and security, along with personalized financial help, are paramount for Gen Z. They seek financial institutions that can offer transparency, honesty, and services that cater to their specific needs, indicating that success can also be measured by how well these needs are met.

Which digital banking solutions are most attractive to Gen Z?

Specific financial products or services that attract Gen Z include those that offer convenience, flexibility, and align with their digital-native preferences. This generation is particularly interested in mobile banking apps, online savings and checking accounts, budgeting tools, instant payments, and personalized financial advice. They are also drawn to financial education resources that help them make informed decisions, underscoring the importance of integrating educational content into digital banking solutions.

Can you provide examples of financial institutions that have successfully engaged Gen Z, and what strategies they used?

Examples of financial institutions that have successfully engaged Gen Z include those that have leveraged social media platforms to connect with and educate this demographic on financial literacy. Financial institutions, like Vibrant Credit Union, have also reimagined the banking experience with their Vibrant Coffeehouses and Kitchen. Creating a welcoming environment that focuses on serving rather than selling, which resonates well with Gen Z’s expectations for brand interactions. Or, Kennebec Savings Bank, whose focus on security and fraud prevention is attractive for newer generations of account holders, while also providing coverage for their core audience and the institution itself. These strategies emphasize the importance of meeting Gen Z where they are, both digitally and in terms of their financial needs and preferences, to build trust and loyalty.


 

Looking Ahead

In this blog, we are scratching the surface of engaging with this pivotal generation. From understanding their financial behavior to leveraging digital banking solutions for deeper engagement, the roadmap for financial institutions is clear. Yet, to truly connect with Gen Z, a commitment to social responsibility and community engagement is also vital.

We invite you to watch the full on-demand webinar, at the link below, to dive deeper into these insights and strategies. It’s not just about adapting to change; it’s about leading it. Be a part of shaping a future where financial institutions and Gen Z can grow together, creating a more inclusive, responsive, and forward-thinking financial landscape.

Catch the full insights and strategies by watching our webinar.
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