U.K. banks are reportedly working harder than ever to gain the business of Generation Z consumers while also finding that these consumers are less brand loyal than older ones.
Banks have offered sign-on bonuses and other incentives to draw new customers, referral incentives to encourage friends and family to send Gen Z consumers to the bank, and kids’ accounts to build brand loyalty among the youngest consumers, Bloomberg reported Thursday (Aug. 21).
They have also enhanced their digital banking offerings to meet the expectations Gen Z consumers have after using other sorts of mobile apps, according to the report.
However, banks have also found that it’s difficult to encourage Gen Z consumers to use the accounts they open. These consumers are more likely than others to open accounts in order to gain sign-on bonuses, maintain multiple accounts while generally using only one primary one, and use separate apps for different financial needs, per the report.
This trend has been aided by a service launched in the U.K. in 2013, the Current Account Switch Service, which makes it easy to switch from one bank to another, the report said.
PYMNTS Intelligence reported in a March 2022 edition of the “Digital-First Banking Tracker®” that U.K. banking customers had used the Current Account Switch Service to change accounts for financial reasons, such as cash incentives, but were increasingly doing so for nonfinancial and service-related reasons.
At that time, 51% of account switchers said they were looking for better online banking facilities, 41% were seeking better mobile and online banking and 38% wanted better customer service.
A July PYMNTS Intelligence report, “Credit Union Innovation Readiness Report: The Real Story Behind Member Churn,” a collaboration with Velera, found that credit unions are struggling to retain younger customers due to a gap between what modern financial consumers expect and what credit unions provide.
Among Gen Z consumers, only 23% are credit union members and 14% use a credit union as their primary financial provider.
The report found that Gen Z consumers are seeking strong customer service, higher credit limits, fee-free ATM access and lower loan interest rates.
