Staying Relevant in the Age of Fintech
Attracting young people with the right technology can make accountholders for life
Young people became major disrupters in behavior-driven markets when companies first identified the teenage demographic as a potential customer in post-WWII America. Ever since, shifts in technology, entertainment, politics, housing and more have been highly subject to the preferences of the next generation.
Companies that recognize the influence of youth culture and adapt accordingly often reinvent themselves for a new era. Those that ignore or dismiss threats, on the other hand, risk market-share loss and even face extinction.
If you don’t capture the next generation today, they might not consider you a viable option tomorrow.
Stay on Top of Trends
In 2012, the children’s cable programming network Nickelodeon lost market share due to the popularity of Netflix streaming service. And they weren’t the only ones (remember Blockbuster?). And 10 years later, those who were children or young adults at that time are now the largest age group (American adults ages 18 through 29) without cable, with only about a third (34%) getting TV through cable or satellite, according to a 2021 Pew Research Center survey of U.S. adults.
Here are the implications:
- Young people have grown up with streaming
- Once on their own and faced with the prospect of paying their own bills, many skip right over cable and stick with a streaming-only approach
- This suggests that younger people don’t even consider it an option, making it rather difficult for companies to recruit new customers
There is a lesson to be learned here for financial institutions, who find themselves facing a similar threat with the rise of fintech: If you don’t capture the next generation today, they might not consider you a viable option tomorrow.
By keeping up with technology and attracting a younger audience, you’ll have generations of customers for life.
Parents Have Influence
How can financial institutions accomplish this? As it turns out, there is a relatively easy way in. And it’s already a goal of many institutions: financial education and wellness.
While young people hold a tremendous amount of influence in the marketplace, parents remain the gatekeepers in this realm. And parents want their children to become informed about finance.
According to the latest research, 91% of parents desire a personal finance app for their children, but only 12% currently have one, according to a 2022 survey by Raddon Research Insights. They prefer the app to be offered through their bank or credit union, the survey indicates.
The features that parents want for their children are not so far off from what their children want for themselves. Priorities may vary, but both are interested in debit cards, savings, education, financial advice, investment capabilities and real-time money transfer, according to the Raddon Research report. These are legacy services that financial institutions have been offering long before technology even existed, with deep roots and a successful track record.
And Gen Z, according to the survey, also understand that convenience should not be the top priority in safeguarding and managing their money. When it comes to security, Gen Z trust banks and credit unions over fintech. And despite having a reputation for being dismissive of authority, young people actually prefer learning about personal finance from a trusted adult.
By keeping up with technology and attracting a younger audience, you’ll have generations of customers for life.
Partner With Fintech
Perhaps ironically, partnering with a fintech can bring the younger generation into the waiting arms of financial institutions. Instead of perceiving one another as foes, financial institutions and the right fintech partner can join forces. Combining strengths to create co-branded platforms will deliver solutions that best serve the full demographic range of clients.
And there’s no one dominating the market in financial education, so you can differentiate yourself now. Building a financial wellness program that includes the features both Gen Z and parents want can be done; however, the challenge is producing a solution that would be easy to use and intuitive enough to keep both adults and children engaged.
Let’s look at the example of Goalsetter. I created this app to teach children financial literacy, economic concepts and principles of financial health in a fun way that meets them in the technology they are comfortable with. The Goalsetter app uses games and quizzes to introduce complex financial concepts and make them relatable to everyday life. Young people can gain experience with financial activities that build wealth, such as stock market investments, and learn how to make thoughtful decisions about saving, investing and spending.
Banks and credit unions can offer this co-branded fintech platform to the next generation of accountholders, delivering a custom debit card, wealth management options and financial education tools accessible through their digital banking platforms.
Fiserv and Goalsetter are partnering to bring tailored financial services to the K-12 youth market. The app is available on the Fiserv AppMarket and as a white label solution for financial institutions.
Looking Forward
Don’t repeat the mistakes of the cable industry. Take steps now to reach the younger generation in a way that’s relatable to them, and you’ll develop loyal, lifelong accountholders.