Many traditional banks struggle to attract younger customers today. Generation Z and millennials are digital natives, and their preference for online convenience extends to banking.
In a 2021 survey by EY, nearly half of millennials and Generation Z participants named a fintech firm as their most trusted financial institution. Another report from Chase found that nearly all members of these generations use mobile banking apps for everything from making deposits to checking credit scores. Younger audiences are online, and they expect their banks to be there too.
As millennials are currently the largest group of homebuyers and Generation Z is becoming more active in the market, banks that cannot appeal to them risk losing significant business opportunities as more flock to fintech options and digital direct alternatives. Already, 70 percent of millennials said having a digital mortgage process would impact their choice of lender.
So how can traditional banks attract younger customers and seize major opportunities? The following steps can help:
1. Humanize Your Brand
As many as 88 percent of consumers rank trust as a key factor when deciding which products and brands to buy. Trust is even more important in banking due to the sensitive nature of finances. For millennials and Generation Z, banking isn’t just about technology; it’s about forming trusting relationships. Your bank’s employees are your best assets for building trust.
Put a human face behind your brand by enabling your employees to connect with younger audiences on social media through a social selling strategy. This involves giving your employees the guidance and resources they need to engage millennials and Generation Z with relevant, branded messages from their own social media accounts.
2. Focus on Financial Education
Young people are often bombarded with misguided or uninformed financial advice from TikTok and other sources. Even well-meaning family members and older mentors might provide outdated or irrelevant information as financial options have grown more sophisticated.
Your bank can fill the education gap by sharing helpful, compelling, and non-promotional financial information. Younger audiences might appreciate a guidebook for first-time investors, a step-by-step student loan repayment plan for recent grads, or information on buying a first home for newlyweds. Online banks might offer speed and convenience, but they don’t provide the guidance young people need to make smarter decisions about savings, borrowing, and financial planning. That’s where traditional banks can build trust and gain a competitive edge.
3. Personalize Your Digital Marketing
Younger customers expect and reward brands that provide a personalized experience. In fact, 41 percent of Generation Z surveyed by WP Engine said they would share their data in exchange for more personalization. In banking, digital customer experiences should be tailored to attract younger customers on an individual level.
Paid social media advertising is an excellent way to get your loan officer’s message directly in front of those who will find it most valuable. For example, you can personalize paid social media ads based on interests, geography, and age, targeting a student loan repayment guidebook to recent graduates in a college neighborhood. This targeted outreach is much more effective than broad tactics like TV or outdoor advertising.
Landing pages are another great option for personalizing the digital customer experience. Create a landing page on your website for each guidebook and gate the content behind an information request form. Visitors can input their contact details in exchange for the content. Loan officers can link to relevant landing pages from their social media posts and collect visitors’ information for a personalized follow-up approach.
With the right technology, banks can match the speed and convenience of fintech services. But the true competitive advantage lies in building relationships and fostering trust. Meet millennials and Generation Z online with a personalized approach and specific value, and your bank will be at the top of their list for their next financial need.
