Just as banks have begun to understand what makes millennials tick, the rise of the digital native Generation Z (Gen Z) has brought a huge shift in customer behaviours and expectations.
These individuals have never known life without digital technologies like smartphones and social media, which has transformed the way businesses must work to communicate and connect with them.
This is a generation that makes no distinction between the online and offline worlds. They could drop a brand or service due to a poorly designed mobile app or a limited number of channels. And with Amazon and Google delivering new, automated and personalised banking experiences to Gen Z’s fingertips, traditional banks face the risk of losing them as clients unless they deliver more authentic experiences.
Gen Z already have a spending power globally of $140bn and have been found to be more financially conscious and independent than their X and Y predecessors. So how do banks cater to one of the fastest-growing consumer markets in the world when their demands are not only different but more volatile?
A personalised banking experience
Being able to manage finances online or via apps was a great solution for millennials (Generation Y). Gen Z, on the other hand, have an attention span of only eight seconds, so will show little patience for digital apps that complicate their lives in any way, or aren’t available on the go. In fact, 69% of them don’t find value in most apps.
Gen Z need to be given instant access to information on the channels they use most. With a quarter spending more than five hours per day on their phones and over half (57%) using messaging apps for the majority of this time, financial organisations must make the most of how a mobile phone is being used to deliver a quick, seamless, and personalised banking experience.
The benefits of messenger banks
A recent study from Facebook found that in the UK, 57% of Gen Z wished they could message more businesses, indicating that younger customers want to connect with businesses on a familiar platform that is fast and reliable.
This is where WhatsApp Business (or similar services) comes into play. They enable businesses to send real-time alerts and notifications while offering always-on support through a chatbot or live agent.
Providing services over instant messaging apps will increase the likelihood of customer loyalty and engagement due to convenience, trust, and familiarity with the app. Additionally, bank profiles can be verified and messages are end-to-end encrypted, so clients and banks feel secure using the platform.
One of the main benefits is an on-demand service, where banks can deliver instant interactive communication with rich content capabilities. For example, customers could quickly open bank accounts, students could speak to their banks to locate their nearest ATM and bank statements could be provided in seconds.
The same applies to customer care, where chatbots can be used to manage more straightforward queries like bank opening times or balance updates. Those that need more complex care can be diverted to contact centre agents for quick conversational support, resolving issues in one-to-one conversations that feel human.
A new era of messenger banks
A disruptive breed of messenger banks have already realised the potential for interactive banking. There is no reason why traditional banks can’t also adopt similar, especially if they partner with the right solution provider to deliver the best use cases for customers.
With Gen Z set to reshape the financial industry, those banks who strive to become early adopters of communications channels as a form of banking will no doubt outshine competitors. And now is the time to do it.
Noel Lavery is UK Sales Director at Infobip
The views and opinions expressed in this Viewpoint article are solely those of the author(s) and do not reflect the views and opinions of Fintech Bulletin.