Gen Z and Financial Literacy: Building a Future-Ready Customer Base
In our rapidly evolving digital age, financial literacy has emerged as a cornerstone for economic resilience and personal empowerment. For financial institutions, providing financial literacy education for Gen Z is not merely a strategic move but a societal imperative. As the first digitally native generation, Gen Z wields unprecedented influence and potential, and their financial acumen will shape the economic landscapes of tomorrow. Here’s how financial institutions can utilize financial literacy to build a future-ready customer base with Gen Z.
Why Financial Literacy Matters for Gen Z
Digital financial education that is delivered in a trusted setting like a classroom can provide the building blocks that young people need to think more seriously about their relationship with money. This, in turn, can lead to tangible action as students start setting up savings accounts and making major money decisions, including financing higher education. Literacy is the first step in this equation – knowledge-building has a powerful impact, but confidence-building is the true motivator that will lead to action. When it comes to selecting a financial institution as a partner, they may first think of the one that helped build the foundation for their financial confidence.
Key Financial Education Challenges Faced by This Generation Today
High school students today receive varying degrees of financial information outside of the classroom. They may rely on social media influencers on platforms like TikTok, which may provide inaccurate or misleading information that isn’t directly applicable to their needs. Depending on their parents’ own relationship and confidence with money, they may not receive a lot of guidance in the home. This can lead to stress and anxiety for teenagers who don’t know how to embrace financial independence when they’re older. That’s why it’s crucial for banks to provide financial literacy education in the classroom – it demystifies the topic and aims to help young people feel more comfortable discussing it with their peers. From budgeting and saving, to navigating student loans, to understanding what to do with their first paycheck, financial education puts students on an even playing field, in a non-judgmental way.
The ROI of Financial Education
When considering the ROI of financial education, it’s important to consider what could be the result of a lack of sufficient financial education. For example, if a teenager doesn’t have a plan for financing higher education, they may be susceptible to taking out large loans and not fully understanding what they’ve signed up for. They might not finish college because of the financial burden that it has caused them, which could affect their career prospects – and make it even harder to pay back the loans they do have. They might not consider certain careers, like the trades, that may be a better fit for their skillset and fall into a career path that doesn’t have longevity. They may find themselves in severe credit card debt because they struggle with saving and living within their means. These are all issues that could be alleviated by proper, reliable financial education. For an institution, this means fostering positive and forward-thinking relationships with Gen Z rather than having to immediately resolve challenges.
The Benefits of a Financially Literate Gen Z
Investing in the financial literacy of Gen Z yields significant benefits for both individuals and financial institutions. Financially literate individuals are better equipped to make informed decisions, avoid debt, and achieve their financial goals. This empowerment leads to greater financial stability and independence. By providing valuable financial education, institutions can build trust and loyalty among Gen Z customers. A financially savvy customer base is more likely to engage with and remain loyal to financial services providers that prioritize their education and well-being. A generation of financially literate individuals contributes to overall economic resilience. They are more likely to invest wisely, start businesses, and contribute positively to the economy.
Sponsor Digital Courses to Enhance Financial Literacy
Financial institutions have a unique opportunity to shape the financial futures of Gen Z. The benefits extend beyond individual empowerment, fostering loyalty and contributing to broader economic stability. As Gen Z navigates the complexities of the financial world, institutions that prioritize their financial literacy will be well-positioned to build enduring relationships and drive long-term success. everfi is well-equipped to help financial institutions do just that by helping them sponsor financial literacy education in schools due to our rich network of relationships with school districts and educators. Learn how your institution can take the first step in fostering a future customer base by going to everfi.com/sponsorship.
For example, by sharing live webinars on debt consolidation and savings, banks can offer value to customers at only a minor cost to themselves, while driving customer loyalty and retention. Similarly, by responding to social media chat as customer service, with employees available to answer questions during business hours, banks can facilitate banking through social media and can cultivate stronger relationships at a decreased cost. Social media marketing for banks moves the primary focus to the consumer, not your product, giving you the opportunity to see who they are and why they interact with you before a need arises, which will help you to improve relationships and future targeting.
2. Generating Leads With Social Media Marketing
In his book, “Jab, Jab, Jab, Right Hook” social media guru Gary Vaynerchuk recommends that less than ¼ of all content posted on social media be promotional. But, at least a small portion of your efforts should be dedicated to self-promotion, including building awareness for products, offers, and selling value. The trick is that because it is social media, your post has to offer direct value to the reader. 63% of mass affluent consumers are actively looking at financial solutions (not necessarily banks) on social media and failing to take the opportunity to make a pitch is a missed opportunity.
How can you connect social media and banking? Use tools like limited-time offers, financial education, special rates, introductions, and personalized solutions through chatbots to create a sense of exclusivity and personalization – which will help you market without tarnishing your relationship with the consumer.
3. Sharing Data and Value
While social media marketing for banks often involves using rather than sharing data, social media gives you new data sources, new insights, and new ways to connect with consumers. One of those ways is to offer industry insights and valuable information in a way that helps you to build trust. Integrate social media into your bank’s marketing strategy by breaking basic finance tips into palatable and shareable Facebook videos or Instagram photos, creating overviews of market shifts, creating helpful content delineating loan options, or otherwise adding value to the customer’s experience to help you to grow while building trust.
More importantly, while these tools help you to build customer loyalty, sound social media marketing strategies for banks can also help you to increase product awareness and drive sales A series of live videos combined with a web page and article content on building a savings account with a savings challenge will drive increased savings accounts at your bank, providing your social media engagement is good.
4. Using Emotional Targeting
One of the most common reasons customers switch banks isn’t rates, it’s emotions. While that’s often anger or irritation regarding customer service, being able to connect with consumer’s emotions gives you an advantage over your competitors. Connect with consumers and driving home the fact that you are there for them when things go right and when they go wrong will build trust.
Creating emotional connections to finance through social media marketing is simple, mostly because there are often emotional reasons behind financial decisions. For example, you can connect loans and mortgages to positive events like buying a new car or home, and savings accounts to family and children, retirement, or college.
Social media also allows you to target your ads and posts more specifically. For example, Facebook and Instagram ads allow you to target based on location, age, gender, career, education, and interests, allowing you to greatly fine-tune what you are saying to the audience who most needs to hear it. How can social media marketing strategies for banks make the most of this? By highlighting periods when products are most popular (tuition loans in August-September, new car loans in January-April), you can create specific campaigns targeted at the people most likely to need them, leveraging the emotional aspects of the product rather than the product itself.
5. Don’t Forget Omnichannel
Most customers interact with your bank through multiple channels, social network banking is one out of many channels. Customers should have the same experience, level of customer service, and even customer service representatives across channels. If you link a product to an offer on Facebook, it should go to precisely that product, not a landing page. By ensuring a consistent, professional, and relevant experience across every channel, you ensure that your customer sees your brand as a personality and one that they can rely on.
Social media is a valuable marketing tool for banks, who can use it to drive customer relationships, building tangible and intangible value. Social media marketing for banks is still evolving, but it is helping banks to be more personal, to build closer relationships with customers, and to offer more targeted products and services than ever before.