Time for Bankers to Take Notice: Gen Z Has Arrived09.10.2018
It’s finally time to start thinking about “Life after Millennials.” While Millennials certainly aren’t disappearing anytime soon, their younger sibling, Gen Z, is getting ready to take the spotlight. Gen Z — defined as those born in 1995 or after — is prompting bankers and their technology providers to ask if the needs and expectations of Gen Z are so markedly different from those of Millennials (those born in 1980 through 1994 [see Figure 1]) that they need to reconsider their go-to-market approaches?
The short answer is yes.
Like every generation before Gen Z, what was new and cutting-edge to the previous generation only serves to form their baseline for what is possible (Figure 1). All generations may currently use the same technologies but the way they think about them is markedly different.
Gen Z Grew Up in the Smartphone Era
Figure 1: Generational Milestones by Big Events, Technology, and Banking Innovations
For example, Millennials grew up with the analog flip phone and eventually got smartphones as they aged – meaning they grew into the technology at the same rate it was being developed. However, Gen Z has always had a full feature smartphone, voice assistants to help them out, and Facebook has always been more than “just” a social media platform. They expect products to not have silos between online and mobile functionality and to be able to complete the entire purchase cycle on a single site in a single session (e.g., using a Facebook Messenger chatbot to order Domino’s pizza).
Javelin’s latest report, “Technologies Influencing Generation Z Payments Adoption,” looks at this shift from a payments perspective and how financial providers can capitalize on their unique preferences. One aspect, discussed in detail in the report, is how Gen Z’s interaction with social media and artificial intelligence is influencing how they want to interact with payments — from e-commerce purchases to complex financial transactions — and what they will come to expect. Specifically, financial providers will need to develop a strategy and product development road map for artificial intelligence, chatbots, and digital assistants or risk losing future customers.
Recognizing this new reality is paramount because it will require a mindset shift in product development, marketing, customer acquisition, and more. Most importantly, at 60 million members, Gen Z is projected to be larger than Millennials. Ignoring the expectations of Gen Z risks a financial institution’s long-term viability but recognizing them today – and taking the necessary steps to prepare for them – will ensure it.
So bankers, take note, “Life after Millennials” starts now.
Rachel Huber is an analyst of payment practice for Javelin Strategy and Research, a research-based advisory firm that helps financial institutions make informed decisions regarding digital strategies and emerging technologies.