Following this announcement, the new study showed that more than half of banking executives that were surveyed across the region of the UK (57%) mentioned that the process of attracting young customers represents one of the biggest issues they are facing in the next twelve months. At the same time, an estimated two-thirds (67%) also say that this process is a vital part of future-proofing their business, with 50% of them believing it is the key to remaining competitive in an ever-evolving market.
This took place against a backdrop of high demand from Gen Z customers and clients for feature-rich banking experiences, with a bigger likelihood of switching their loyalty to another provider if their needs and preferences are not met.
According to the study, nearly half of the Gen Z customers (46%) that were surveyed are already leveraging third-party money management applications in addition to their core banks, which indicates that clients are increasingly turning their needs to other providers in order to optimise the manner in which they understand and better manage their finances. An estimated 31% of Gen Z also mentioned that their banks were at risk of losing them as customers if the digital tools and services were not upgraded.
In addition, Tink’s research also found that Gen Z clients could also be lured to a competitor by the offer of customised support in meeting financial goals (49%), or other products needed in order to manage spending (48%). Gen Z customers would also like to see their primary bank deliver more visibility of finances (57%), as well as optimise the way they manage the cost of living (55%), indicating that tangible support with day-to-day finances is a priority of Gen Z.
At the same time, there was also a recognition by the surveyed executives that the banks and financial institutions need to upgrade their solutions in order to attract young users, with 63% acknowledging that the generation expects more and improved products from them. The research also found that some banking executives still face several challenges with attracting these customers, which they attributed to Gen Z’s perceived lower tolerance to friction (33%), as well as the overall preference for challenger banks and financial institutions (32%).
As a result, Tink’s report shows that banks and FIs need and want to take action in order to invest in digital financial management tools, as an efficient and secure way to attract and keep users. Over three-quarters (79%) of banking executives also believe that banking applications or online banking tools, such as money management tools, are important for user acquisition. A similar number (74%) also agree that digital financial management products are also helpful in the process of retaining customers.
Furthermore, 72% of surveyed banking officials also mentioned that developing financial management tools that further support customers represents a top priority. However, some processes of implementation bring challenges, with 70% of banking executives believing that growing client demand outstrips their overall current development capability.
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