New Generations Mean More Expectations from Banks and Credit Unions
by Gregg Early
An interesting article in Tearsheet discusses a recent CapitalOne study that shows how much concern there is for financial wellness within Gen Z.
It’s a significant amount.
Nearly 80% wish they were taught basic money skills at school. And 83% say they learn about finance from their families.
Let’s put this in perspective. Gen Z are people that are born between 1996 and 2002, more or less. That demographic has 86 million people in it.
The interesting thing is the baby boomers only represent about 74 million people.
So, generally speaking these numbers are saying that a population the size of the baby boomer generation feels financially inadequate and are hungry for a better financial education.
Also bear in mind that Millennials (born 1980-95) also represent 83 million people that are starting to hit their prime earning years and are another demographic that’s larger than the baby boomers’ generation. They were the kids that and young workers that saw the fallout from both the dotcom bubble of 2000, and the financial meltdown in 2008.
Whether this is simply the evolution of a dynamic capital economy where younger and younger generations are seeking more tools for their financial success, or whether it’s simply a reaction to the long bull market that has lured them into meme stocks and cryptocurrencies can be debated.
But what isn’t debatable is the fact that post-baby boomer generations are clamoring for a deeper relationship with someone to help them navigate their financial lives.
This is an enormous opportunity for community financial institutions to reach a significant number of new customers and members beyond baby boomers.
This isn’t just about open banking. Allowing people to conduct their banking online is nice, but it doesn’t address the needs of 160 million potential customers that are clamoring for more guidance. They want a partner and advisor as well as technology to support a post-9 to 5 work and personal life.
These individuals are looking for help for their personal financial lives without having to trust social media influencers or talking head on financial television.
What I have learned over decades of working with skilled professionals at various life stages is that someone may be a great doctor, engineer, or systems architect, but that doesn’t mean they know anything about investing, saving, or retirement planning. As a matter of fact, it’s just the opposite. The most successful people tend to be the most focused on their passion. It’s only when they approach the end of their careers do, they realize they need to develop a new skill set to keep the good times rolling once a work-focused life is gone.
This desire by younger generations to get involved in their financial wellness at much earlier ages than previous generations is an enormous opportunity for both legacy financial institutions as well as fintechs.
By creating challenger banks that can weave a variety of financial wellness tools into their digital banking platform and help empower their staffs to add a personalized human element by leveraging data analysis tools, they have the power to change the relationship between banks and customers.
And if they don’t seize the opportunity, they may well find themselves watching 160+ million potential customers pass them by.
GS Early is an award-winning financial writer and editor, and a fintech communications and market veteran, working with Moven, Jack Henry, and Geezeo.
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