Neobanking Insights From Gen Y and Z
As the financial sector works to win millennials and generation Z as clients and harness their ingenuity as employees, both groups are coming into their own in unique ways. However, their traits with money go hand in hand with their strengths and weaknesses at work.
Below are the key facts regarding these two crucial generations that credit unions, neobanks, and banks need to know.
Some Key Statistics Regarding Gen Y and Z
According to Deloitte’s study on both of these generations, over 46% of Gen Zs and 47% of Millennials worry that they won’t be able to pay their bills because they live paycheck to paycheck. Almost one-third of all participants in the study from both these generations don’t feel secure financially and aren’t confident that they’ll be able to retire at some point with comfort.
Moreover, 43% of Gen Zs over the age of 17 have taken part in working a full-time second job or a part-time job as an addition to their primary source of income. The number of Gen Y who have done that is one-third.
Customer Support Preferences
Most respondents in Ceros’s survey preferred similar assistance channels in terms of their preferences. Each group’s largest subgroups preferred live, human-driven help channels. Live human chat, contact center services, and physical store visits were all highly desired by all three groups, while live chat seems to be the most popular option overall.
Additionally, and not surprisingly, 27% of Baby Boomers chose this channel, compared to 53% of Generation Z responders and 42% of Gen Y who wanted to be able to get their solution online.
Loyalty and Adoption
Both millennials and Gen Z users are less loyal and more likely to switch to another platform if they’re unsatisfied with what they get. Moreover, both of these generations are the leading adopters of new technologies like cryptocurrencies and blockchain, with over 50% of respondents having said to have invested in crypto at some point.
Gen Z feels that their education in finance was inadequate, particularly in the areas they feel are most crucial to understand. As a result, 38% of Gen Z’ers are learning about personal finance from social media, with 34% mentioning TikTok in particular, as opposed to 17% who are studying it in a high school or college class.
More than half of Gen Z and Millennials (56%) said they intentionally seek financial information and advice through social media, according to a separate poll by Credit Karma. One in every two Millennials believes they will visit Facebook, but Gen Z prefers TikTok. Both heavily utilize Instagram for various purposes, including news and information-gathering.
Why is This Information Important for Neobanks?
Realizing how much more financially insecure these generations are compared to baby boomers, it’s easy to conclude that some of them need help and would gladly accept it. This offers opportunities for a white-label digital bank to offer AI budgeting, savings profiles like vaults, and many other features that help gen Zs feel financially more secure.
This can very well become a key selling point for these two generations. Combine it with the fact that both of these generations prefer getting their solutions online or via a digital banking platform, and you’re on the right path.
Moreover, by having a good idea of where you can meet each generation — Gen Z on TikTok, and Gen Y on social media like Facebook, you know where you can target them. White-label digital banking has come a long way and can now offer everything both generations need to feel secure and less anxious about their lack of financial knowledge and experience.
Even if your digital bank doesn’t have the features to educate millennials and Gen Z’ers on the platform, you can reach out to a neobank as a service provider and ask for such a feature. Imagine each time they get on the app, a quick informational trivia pops out to educate them.
In no time gen, Z’ers would stop being so concerned and would start utilizing the digital app up to its full potential since, despite their anxiety towards financial knowledge, they’re extremely tech-savvy compared to baby boomers.
Knowing all of this will enable you to somewhat step into the shoes of a Gen Z’er and know what they need and what they’re looking for. Another key aspect is that the majority of Gen Z’ers over 17 are still very financially dependent on their parents. This is the greatest contrast between them and Gen Y.
While this is the case, more than 75% of users from the same generation expect to achieve a higher standard of living than their parents. Allow them to do so by giving them access to financial information and the ability to invest, and you will undoubtedly become their favorite bank to work with.
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