Page 14 - Spring 2024_Neat

Are You Ready to Onboard the

Next Generation?

BY DAVID PETERSON

The output of that group
Perhaps you know someone who is between the ages of 14
became a white paper titled
and 25. It could be your child, a niece or nephew or even just someone “The Next Generation of
with whom you are in regular contact. How much time have you
Banking.” These young bankers
invested in understanding how they experience their digital world? did the hard work of research,
The way they interact with the technology that is key to their school,
creating drafts and ultimately
entertainment and even professional lives? What is it about short
condensing the myriad volume
form mobile entertainment (think TikTok) or gaming (think Family
of data and statistics into a
Island or Roblox) that is so appealing to them? How do they make
tight expose that illustrates the
purchases while using those apps? How do they transact with their
challenge banks face in
friends? And what is their attitude towards a bank and the services that
attracting and keeping younger
it offers?
customers. It is packed with
statistics with citations of
These issues and many more like it paint a picture of how younger David Peterson is SVP & Chief
source material used. More
millennials and Gen Zs think very differently about how they consume Innovation Officer at First
importantly, the white paper
virtually any product or service. Thus, the issue of whether a financial National Bankers Bank, an ACB
provides tangible options for
institutions is able to attract and keep the younger customers they Associate Member. You may
how a bank might choose to
need to remain viable in the coming years becomes strategic. Consider connect with David at
change course on the
that each year, your institution loses a certain number of customers. dpeterson@bankers-
technology, marketing and
Some of those losses represent older customers who unfortunately bank.com
advocacy elements they would
pass away, but are you adding new, younger customers that would
equal the number of lost customers? The good news is this is an deploy to ensure they were
answerable question. From your core system, run a report of the strategically planning for long-term viability.
number of customers aged 50 or older whose accounts closed (or went You can access a copy of the white paper {here}.
to zero or virtually zero) in 2023. Then run another report of the
number of customers that were added that are 35 or younger. If you are part of your institution’s C-Suite, you should read the initial
Compare those two numbers. Did the younger new accounts equal or five pages of the document which includes a narrative from the four
exceed the older customers you lost? primary authors and an executive summary. If you are in charge of
marketing or deposit ops, you should read the white paper front to
Another angle to consider is deposit volume. As Baby Boomers likely back. The result might be that the information contained in the white
represent the segment of customers with the highest value of deposits, paper can form the basis of an ongoing dialogue about how your
the issue of where those deposits will go when those boomers institution is addressing the challenge of replacing an aging customer
unfortunately pass away is certainly an issue worth serious study. How base and also consider how much you are regularly communicating
many younger customers would it take to add to equal the amount of with young millennials and Gen Zs. This could be the aforementioned
deposits to cover one senior’s account going to zero? It could take as group or at the very least, talking regularly with the younger
many as fifteen new young millennials or Gen Z accounts to equal the employees at your institution. At the end of the day, if we are not
deposits of one lost baby boomer. You could assume that the baby regularly looking to them to educate and inform on issues that directly
boomer’s wealth will pass to their Gen X children and at least some of related to their demographic, who are like, EXACTLY like them, then we
those children might bank with you. More common is inheritance are never going to truly create the appropriate marketing and
money going directly to millennial grandchildren. Research indicates advocacy messages needed to inform and entertain. Your institution
that fewer younger customers are relying on banks to provide basic can be EXACTLY suited to fulfill their financial needs, both today and
financial services. They believe that Venmo replaces the need for a into the future, if, you begin the process of adjusting to how your
banking relationship. This should concern you because if your messaging is tailored to their unique way of listening.
institution falls behind on replacing customers or their deposits, there
is a definite timeframe down the road where your institution may no
longer be viable.

Even a correspondent bank is affected by this issue. After all, without
thriving community banks, to whom would our service be directed? To
address these issues, a group of FNBB employees who represent the
young millennial and Gen Z generations began to have monthly
conversations about how they and their friends conduct financial
transactions. They discussed how they and their peers consume
marketing and advocacy messaging and how that compares to what
banks traditionally offer. They brainstormed what would a bank need
to do to specifically appeal to…them.

A COMMUNITY BANKER | 14 | Spring 2024
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