If you were not one of the 500 registrants and 220 viewers of our September 10th webinar hosted by the Financial Brand, here’s the high-level summary of insights and the practical steps that community banks and credit unions can begin to take now to win Gen Z while retaining legacy clients.
Gen Z is now the growth battleground. They’re a large and growing part of the workforce that will also be beneficiaries of the great wealth transfer. Mega banks and neo banks are investing heavily in this market. Meanwhile, younger consumers are already saying what we expect: over 50% of Gen Z and Millennials say a strong digital banking experience is a top priority when choosing a financial institution. Smaller CFIs are not nearly as focused on this market because they are trying to compete in the trenches holding onto their current, older customers. But there is good news. While only about 2% of Gen Z currently bank with community institutions, 52% say they’re willing to switch. The squeeze comes from habit and perceptions: 79% use large banks and another 8% use online-only players. (<E Marketer, October 7, 2024>)
Closing that “activation gap” requires understanding and aligning with what Gen Z values and signaling that clearly in all your communications and interactions.
The irony is that CFI’s already offer a portfolio of products and services that Gen Z wants. The key for success is attacking the perception gap, emphasizing the human benefits of local community banking, and continuing to evolve your institution’s tools and customer experience to meet Gen Z’s growing expectations.
What Gen Z expects (non-negotiables): instant everything, radical clarity and transparency (no fine print, clear SLAs), in-app guidance (smart nudges), and social-ready UX that feels more TikTok than TurboTax. They also want advise from people they trust. CFIs have most of what they need to build that trust, starting with simplicity in product design, lower fees on transaction and savings accounts, and better rates on deposit and lending products than the mega banks. But there is still a lot of work to do. We believe the smart place to start is inside-out, brand-led mission, vision and values to create a culture that embraces continuous innovation.
1. Five cultural shifts to make now: Move from product lists to a brand-led purpose that aligns with Gen Z values.
2. Shift from features to proof—show receipts: first-time homebuyers served, fees avoided, dollars saved.
3. Flatten silos and empower cross-functional teams to ship improvements in 90-day cycles.
4. Treat mobile as your first branch—then invite Gen Z clients in for life-moment counseling.
5. Spotlight community outcomes, not just community acts.
Practical playbook: run cross-functional brand workshops; translate behavior into employee playbooks; appoint brand champions in every function; host friction forums to surface and fix onboarding and service gaps.
It works. One bank we discussed in the webinar, Taylor Bank, realigned its culture around being “Always here. For Good.” Today, that realignment has driven product innovation in the form of Tally, its mobile banking experience, and a new “For Good” checking account that rewards debit card users with bank contributions to locally based non-profits. Those contributions are shared with customers each year, with a spotlight on the recipient’s charitable works within the community. In the first year, For Good Checking has surpassed its free checking account customers with a significantly higher average account balance.
Bottom line: Community institutions already have the heart and most of the tools in their arsenal. It’s time to up the innovation culture to deliver digital speed, ease and proof. Those institutions that live this kind of culture will win Gen Z without losing Gen X and Y. But start from the inside-out with brand-led purpose.
Here’s a link (https://thefinancialbrand.wistia.com/medias/ziekcm2qyj) to the video of the webinar. Start today.
Read More
