In a competitive financial services market driven by agile players, Jesper Domargård, Marketing Director at CompoSecure, shares how banks can stay relevant and maintain strong customer relationships.
As Gen Z—a cohort born between the mid-to-late 1990s and early 2010s—comes of age, the financial services industry is increasingly shifting its focus from Millennials to this younger, more digitally native generation. Unlike Baby Boomers, who often relied on a single ‘primary bank’ for multiple financial services, Gen Z is redefining the banking landscape. This generation does not stick to one single provider; instead, they tap into a broad ecosystem of financial services, often spanning across traditional banks, fintechs, and neobanks.
Dubbed ‘Generation Bank Switcher’, Gen Z’s loyalty to a single institution is tenuous. A recent report reveals that over 40% of US Gen Z consumers changed their bank in the past year alone. This ‘fragmentation of banking’ is even more pronounced in developing markets, where historically underserved populations have leapfrogged into financial inclusion through innovative fintech solutions. For instance, in Kenya, M-Pesa, the mobile payment platform, helped drive banking penetration from 27% in 2006 to 75% by 2016.
This unbundling of financial services poses a formidable challenge to traditional banks accustomed to keeping everything from checking accounts to mortgages under one roof —a model favoured by Baby Boomers. Compounding the issue, many consumers are more familiar with fintech brands (69%) than the newer offerings from incumbent banks (59%). This leaves traditional financial institutions struggling to effectively communicate their innovations as they compete with a growing roster of agile competitors in the financial services space.
In the light of this fragmentation, how can banks stay relevant and preserve customer relationships? Payments—the most frequent touchpoint between banks and customers—offer an effective yet often underutilised channel for engagement. The humble debit or credit card, used multiple times daily, has untapped potential to reinforce customer loyalty, brand recognition, and ‘customer mindshare’.
What steps can banks take to transform the card from a simple piece of plastic into a tool for meaningful customer engagement? One approach is personalisation. Allowing customers to choose their card design—whether by printing a cherished photo, such as their grandchildren, on the card surface or opting for a sleek, clean, minimalist aesthetic by removing visible card credentials like the card number and expiration date (these details can instead be placed on the back or accessed via an app)—can create a stronger emotional connection.
Functionality and material can also set cards apart. Features like LEDs that light up during transactions or premium materials such as metal or even glass offer novelty and exclusivity. For a truly standout offer, banks can combine features and materials—for example a metal card with a built-in LED, elevating the customer experience even further.
For years, banks have focused on making their cards ‘top of wallet’. In today’s fragmented financial landscape, the opportunity lies in going further—leveraging cards to make the bank and its brand ‘top of mind’. Banks that seize this opportunity and transform everyday payment tools into symbols of engagement and innovation will position themselves as leaders in an unbundled financial services future. Only time will tell which institutions rise to the challenge.
About Jesper Domargård
Jesper Domargård, Marketing Director at CompoSecure, possesses a diverse and extensive background in various sectors of the payments industry, having previously held positions at Visa, Worldline, and IDEMIA before his tenure at CompoSecure. He's widely recognized for his analysis and comments on the payments field, with several of his articles featured on various platforms. Jesper holds an MSc in Business administration from the University of Linköping, Sweden.
About CompoSecure
Founded in 2000, CompoSecure (Nasdaq: CMPO) is a technology partner to market leaders, fintechs, and consumers enabling trust for millions of people around the globe. The company combines elegance, simplicity, and security to deliver exceptional experiences and peace of mind in the physical and digital world. CompoSecure’s innovative payment card technology and metal cards with Arculus security and authentication capabilities deliver unique, premium branded experiences, enable people to access and use their financial and digital assets and ensure trust at the point of a transaction. For more information, please visit www.CompoSecure.com and www.GetArculus.com.
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