Gen Z is Ready for Banking
And that's not a good thing. Their digital education includes siloed educational systems that regularly fail them. Will your "digital experience," siloes and apps replicate this education?
After hours of remote classes, studying and quarantining at home, my son got ready to take one of his finals. Except the password he had purchased (!) for the class did not work. He has used it before to take midterms and quizzes. But this time, he was not allowed into the online space to take the final exam. Because he’s 3 states away from where his university & professor are physically located, he can’t take the exam in person and he can’t go to his professor’s office during office hours or take his laptop somewhere for support. Online FAQs for IT support were minimal. He got more suggestions from his friends who had similar failures. He emailed the professor and the IT support call center and waited for their replies. He missed the exam and waited almost a week to hear back from his professor. What was her reply? Let’s get on Zoom. I have no record of you being enrolled in this class. What was IT’s response? Did you check your password? Did you try closing your browser and logging back in? Yes? Well, it’s not our application so we can’t do anything more.
The communication void among the siloes – student, teacher, IT and administration is astonishing.
A college student these days is supposedly technologically savvy – but how does a student leap the abysses between the siloes? Everything is digital - but what happens if technology can’t overcome distance & siloes?
This sad tale (as yet without an ending) mean for bankers (and the vendors who serve them) has at least a few lessons: Easy-to-use apps mean nothing if the system(s) they support breaks down or require human intervention to work properly. Bridging the divide between siloes within the bank is essential - not a nice to have. Leaving customers in the lurch without any useful digital or human means of support is inexcusable in 2020, soon 2021. Passing the buck is not support.
It also a lesson that bankers must take digital transformation throughout the bank seriously.
Think digital transformation is beyond your strategic and technology reach? Senior management timid about committing 100% to digital banking beyond a better-looking app and faster account opening? Too afraid of the data, processing, operational, security, fraud, risk and other calamities that await you if you try to connect systems that have never been connected?
Your fear, timidity, your waiting, your reliance on aged systems could end up costing you more than you think.
Gen Z is ready and waiting. They are gaining experience and expertise in failing & siloed systems and technologies. It may well prepare them for banking capabilities:
The website that buries information about accounts for teens and certainly doesn’t include it in their mobile app.
The app that expects them to do all the work to understand their finances - even if they don’t understand budgets and financial management.
Notifications & other processes that call them when they prefer text messages.
Failure to support popular P2P payment capabilities (for what it’s worth, my son has never asked me about Zelle. Sorry Zelle.).
Bill payment that requires them to manually set up each biller – or worse yet, create an online account at each biller before bill pay can work.
Still offers checking accounts (this is particular to the US) even though they have never written a check. Checks are something a grandparent used to give them because, yeah, grandma and grandpa learned to use PayPal or Venmo - just like they’ve learned to use FaceTime & Zoom.
Photo by Meg Boulden on Unsplash
But with their options multiplying by the month, I wouldn’t bet on Gen Z’s waiting for banks – legacy or otherwise – that can’t get their technological acts together.
Is this a call for teen challenger banks? Short answer: Probably not, because Hidden tribes. But I’ll have more on that topic soon.
It is a call for banks to take a hard look at what we have called the “back office” - core banking systems, operations, risk, data - and decide if any of it is ready for the demands of banking in 2021 and beyond.
Have a look at my writing about digital banking transformation. Start with Four Lessons Digital Banking Vendors Can Learn from Rick Wilson & Politics. Ask me questions, start a conversation below, LinkedIn or twitter. If you’re really shy, connect through my website. I’m gonna reply anywhere & everywhere.
Who publishes this newsletter?
I’m a former Gartner analyst, now an independent analyst & consultant. I’ve worked in and covered the banking industry for 27 years. I think & write about digital banking — but also indulge my other interests, women in tech, startups - especially those in the US Midwest & South Eastern Europe), leadership & change, and AgTech.
I write this newsletter for people and companies who are trying to differentiate their banking software in an increasingly competitive market. That could be people who work at software companies currently developing banking software or people at vendors that want to move vertically into the banking market. It’s also for bankers and investors who want to know more about digital banking transformation strategies & the technologies that power them.
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