Banks of all sizes are getting more creative in trying to appeal to Generation Z.
Bank of America and Clinton Savings Bank, an eight-branch bank based in Massachusetts, are two examples of financial institutions that are courting members of the demographic when they are still in high school — if not before.
Although the accounts for young customers — Gen Z includes anyone born from 1996 onward — largely resemble those available to adults, with some kid-friendly tweaks, the two banks are jazzing up their offerings in other ways, from a well-regarded financial education hub to a budding influencer program.
High-school tellers, social media influencers
Clinton Savings Bank, which has assets of $629.3 million, has two branches in high schools. They're fully functioning branches exclusive to the students and teachers at their schools, and trained students serve as tellers.
So far, the two high schools with branches — in Bolton and Boylston — plan on holding classes in person, so this year’s training program will continue as planned. Clinton may move its training online if plans change.
The community bank nurtures its young customer base in multiple ways. Several years ago, it partnered with Banzai, an online financial literacy program that simulates real-life financial scenarios for students, and sponsors the program for local middle and high schools upon request. The program is free for educators and students once it’s sponsored by a bank or credit union.
Clinton also has its eye on college students.
“We’re always thinking about what we could do next,” said Ellen McGovern, the chief marketing officer at Clinton Savings.
Recently, McGovern and her team created a social media ambassador program for college students in Massachusetts. They sought college students with 5,000 or more followers across their social media accounts and recruited them as influencers who could promote the bank’s services to their peers.
Ambassadors get a box of Clinton-branded swag, including water bottles, travel mugs and earbuds, and will receive a monthly deposit into their checking accounts provided they post regularly — often with free gear in hand — across Instagram, Facebook and Twitter. A draft letter to ambassadors said the monthly deposit would be $200.
Although the ambassadors are in place, the program has been tabled until January because so many colleges are beginning the school year online. For similar reasons, Clinton is also delaying another college-oriented initiative: partnering with professors to introduce a class project to their marketing and communication students, who will be tasked with designing a promotion for a student checking account — complete with a budget for video production.
Clinton consulted with students when creating its Get Real Checking and Get Real Statement Savings accounts for Gen Z customers. (Student input is behind the “Get Real” moniker, too.) For elementary-age children, the Scratch Kids Club Savings account comes with its own mascot, Scratch the Savings Cat, who visits schools and interacts with students.
Deposits in these dedicated accounts have grown year over year. In July of 2019, Clinton had amassed $1.6 million in deposits from Get Real Checking, $1.4 million from Get Real savings and $214,000 for Scratch savings. This past July, overall balances grew to $2.4 million in checking, $1.8 million in savings and $244,000 for Scratch savings.
“When you look at the big picture you don’t think it’s a lot, but for us, we’re moving in a positive trend,” said McGovern. “These are our customers for our future.”
Online learning, college branches
Students under age 24 won’t pay a monthly maintenance fee for Bank of America’s Advantage SafeBalance checking, Advantage Plus checking or Advantage savings accounts. Digital features, such as money management tools and the virtual assistant Erica, are open to everyone.
“The core products we offer to all are also those we offer to students,” said Kevin Condon, product manager for consumer deposit products at Bank of America. “We feel it helps them stay with us longer because they understand and have access to digital functionality.”
The bank has moved up its timeline of when it targets its young audience.
“Increasingly, students arrive on college campuses with a relationship to a financial institution,” said Condon. “In the past, they’ve shown up and needed a local checking relationship. So we’ve expanded earlier into high school to establish a relationship as early as possible.”
In 2013, Bank of America partnered with the Khan Academy, a nonprofit that produces learning resources, to develop BetterMoneyHabits.com, an educational website with articles, infographics and videos covering a swath of financial topics. Although the content is meant for all audiences, “it helps young adults become more financially resilient by giving them resources, tools and tips to establish budget, set financial goals and starting saving behaviors,” said Condon.
In a 2019 report from the research and analytics company Raddon about Generation Z, the author wrote that Bank of America’s partnership with the Khan Academy, “is a great example of combining authenticity along with modular learning topics that allow learning tailored to individual interest areas as opposed to blanket topics, which can seem daunting.” Financial education via video is one key way to reach Gen Z, according to Raddon.
Bank of America also has about 100 branches it calls student centers. These are located near college campuses, are sometimes decked out in the school’s colors, and are staffed with employees who are familiar with the educational material from Better Money Habits.
Students "are a critical element of our annual outreach and marketing efforts,” said Condon.
To be sure, traditional banks aren’t turning out the same elaborate banking services for Generation Z
“Banks may reflavor [these accounts] a bit, but there is not a whole lot of effort to change or revisit what kids need,” Andrew Vahrenkamp, senior research analyst at Raddon, said in a July interview.
But unlike most challenger banks aimed at the young customers, full-service institutions can more seamlessly accommodate them as they age into more valuable lifelong customers.
“Fintechs often have a great idea, and they implement it, and it’s awesome. But they may not have the next great idea,” said Vahrenkamp.
