Financial institutions should seek to engage with younger customers on their preferred platforms and in mediums that resonate with them, like on Spotify, panelists at American Banker's Digital Banking conference said.
At the conference in Boca Raton, Florida, this month, experts said that Generation Z wants to feel like their financial institutions understand them and that they can trust their banks. Banks can strike this balance of being hip and trustworthy by leveraging user data to market to clients through outlets like audio streaming platforms.
Brian Elkins, head of the financial services practice at brand consultancy Monigle, said Gen Z is seeking decision support, meaning resources that provide financial literacy and information for them to map their financial journeys. He said Gen Z wants to understand their financial needs "on their terms," in ways tailored to match their identities. Elkins added that younger people don't look at financial planning the same way older generations did now that people are living longer and shifting careers more often.
Elizabeth Song works at Spotify, helping financial institutions market and find their audiences on the audio platform. Banks can run ads within podcasts and other content that's popular with target clients. Song said music is also an opportunity for banks to be more creative by making or sponsoring playlists that could resonate with potential clients.
"If you really mean what you say about meeting customers where they are, the fact is that music streaming and podcast listenership are on the rise," Song said. "Gen Z and millennials can't live without their playlists. They can't live without their favorite podcasts."
She said her goal is to make ads nondisruptive to listeners. She added that the more people are engaged with the content they're listening to, the more they'll be engaged with the ads attached to that content.
Fintechs like Greenlight and gohenry have drawn millions of teens with features like savings goal tracking and customizable debit cards.
Song said younger generations want more from banks than just financial products, they want personalized content and services. According to Spotify's 2022 Culture Next report, 80% of Gen Z financial service customers said they like when brands are able to connect with different sides of their personality. She added that, for banks, transactional data from users isn't enough information to design a fully tailored experience.
"We have a lot of fun data that we can share with [financial institutions] for a 360 audience profile," Song said. "If you really want to understand what Gen Z and millennials are going through, it's also going to be the data about their nonfinancial moments. What do they love doing? What do they love listening to? What are their passion points? That's really going to help bridge that gap from being a transactional provider to more of a lifestyle brand."
Gen Z is also more comfortable giving their data to financial institutions in exchange for content that feels in line with their identities. According to a study by Arizent, American Banker's parent company, in partnership with Monigle, 73% of people said they are willing to share their data in order to receive personalization.
For example, Spotify Wrapped is an annual marketing campaign in which Spotify creates personalized snapshots for each user based on their listening data from the previous year.
Elkins said he's worked with some financial institutions that worry about leveraging user data. Younger generations prefer personalization that can be determined by their behavior and activity, he added, in part because they're accustomed to that type of service from companies like Amazon, Netflix and Spotify. He said the mindset around companies using user data has shifted over the last five to ten years and that financial institutions should conform their "voice" based on platform, demographic and medium.
"Personalization can be everything from the actual product that you're delivering, but more than anything, it's about how you show up in a moment," Elkins said. "What voice are you using? What kind of content? Is it more snackable at that moment? Is it more long form? Or is it digital audio? I think it's really about being into that, and thinking about user-specific moments and how you shape your communications."
