By John Cohron
Chief Executive Officer
John M. Floyd & Associates
Generation Z, defined as those born between 1996 and 2010, may not be high on your radar—but they should be. According to Business Insider Intelligence’s 2019 report, Banking and Payments for Gen Z, this generation has:
- Up to $143 billion in buying power
- Not yet aged into credit cards or loans
- More interest in digital payment products and services than any previous generation
They’ll also represent 40 percent of American consumers in 2020. All of this translates into a huge opportunity if you’re prepared to serve them—or a threat if you’re not.
The Financial Brand reports that convenience tops these digital natives’ reasons for choosing digital, online-only bank accounts, by a margin of 2:1 over recommendations, online account opening and lower fees. To combat this shift in banking preferences, it will take more than just physical branch or ATM locations to attract Gen Z to your credit union. It will take a combination of technology, competitive rates, and customer service centered around one factor: convenience.
Make Your Overdraft Program Gen Z-Accessible
When it comes to providing Gen Z with convenience, your overdraft (or courtesy pay) program is a great place to pick up a win. Implementing a fully disclosed, compliant service for your members offers three-fold convenience for a seamless experience during what could otherwise be stressful time.
- The convenience to pay in the moment without worrying if it will be covered.
Having had information at their fingertips since they could say their first words, access to two-day shipping for almost any item imaginable, and real-time feedback via social media, Gen Z is accustomed to instant gratification with very little wait time. When they’re in a financial bind, needing to make a payment but short on funds, they don’t want to have to call their bank or credit union to check what their overdraft limit is that day. With a disclosed and transparent overdraft approach, they’ll know upfront what to expect, giving them the confidence to make financial decisions immediately and move on with their lives.
- The convenience of not having to find another means to pay during an emergency.
When Gen Z knows they have access to X dollars for a Y fee, they may decide it’s worth it so they don’t have to search for a less convenient, more time-consuming way to make a payment or purchase—like asking family or friends for a loan, selling their belongings, or picking up side gigs.
- The convenience of communicating via their preferred methods.
An overdraft program with the ability to communicate with members via email and text will undoubtedly appeal to the accessibility and hyper-convenience Gen Z seek. It’s also the preferred method over paper-based communication from an environmental standpoint, something younger generations place a high importance on. And if Gen Z likes your service, you can be sure they will let others know through their digital word-of-mouth method of choice.
Is your overdraft service offering Gen Z that much sought-after convenience they’re heavily basing their banking choices on? With a fully disclosed and transparent overdraft program that evolves with the times, you can provide a modern, convenient service to members of all generations.