Key stat: Nine in 10 banking executives believe they know how to serve Gen Z banking customers. But 34% of Gen Zers say traditional banks don’t understand their needs.
This finding is based on an IBM survey of 3,000 Gen Z bank customers and 750 C-suite banking executives in the UK, Germany, and Spain.
What do banks think? Banks in the UK and Europe may be slightly off-base when it comes to serving Gen Z, but the survey revealed that while these banks worry about retaining the younger cohort as customers, they’re confident that ultimately, they have the capabilities to keep them hooked.
- 91% of bankers surveyed acknowledged that Gen Z consumers will be the biggest influencers on their bottom lines in the coming years.
- But incumbent banks know they face challenges. Fifty-three percent of bankers cited their legacy tech systems as a major hindrance to serving Gen Z. Despite the outdated technology, though, 86% said they still believe that they have the capabilities to properly serve the cohort.
- The banks are also keenly aware of how Gen Z differs from older generations. Eighty-seven percent of bank execs said they are worried about Gen Z’s willingness to switch banks more easily than older cohorts. Similarly, 86% said they are worried about the generation’s propensity to make ethical and environmental issues a priority when selecting a banking provider.
Gen Z speaks up: The Gen Z survey respondents confirmed banks’ beliefs that they behave differently from previous generations. But it’s not all bad news for banks.
- Nearly half (48%) of Gen Z respondents said they would switch banks in favor of a better customer experience.
- Almost two-thirds (64%) of Gen Zers said they’d move away from banks that did not meet their expectations on ethical or environmental standards.
- But Gen Z reported high levels of trust in incumbent banks, with 55% saying they trust banks with sensitive matters like fraud more than they do neobanks. Only 11% of Gen Z respondents said they trust neobanks.
- Zeroing in on the UK, 38% of Gen Zers said they aren’t confident that banks have the proper tech capability to meet their needs, but 89% of UK bankers said they believe they do.