Younger generations are taking a high level of interest in their financial future according to a TD Bank survey. It revealed that, when choosing a bank, some 20% of Gen Z (broadly, those born between 1995 and 2015) believe the offer of everyday financial advice, guidance and readiness classes to be the most important consideration.
According to a survey conducted by Bank of America, 57% of Gen Z are saving money every month, which the bank notes is a significant difference compared with previous generations, who found saving money more of a challenge for reasons including high levels of debt and financial instability.
The findings coincide with the results of a survey by US online student financing marketplace Lend EDU, in which 75% of Gen Z say they are concerned about taking on too much debt, and 72% say that they are actively working to reduce their debt levels.
The TD Bank survey also showed 60% of Americans prefer to discuss important financial decisions in person at a bank branch and seek the opportunity for banks to provide these requested offerings.
Chris Yancey, head of integrated sales and advice for consumer distribution at TD Bank, shares more detail.
Q: Sixty per cent of American Gen Zers still prefer to seek financial advice in person. Why is this? Are you surprised since this generation is more digital savvy?
A: While this generation is digitally savvy, they’re still looking to build trust for important decisions. The Covid-19 pandemic pushed digital adoption in almost every industry, but people prefer a hybrid scenario — one that allows both the ability to make day-to-day decisions on their mobile devices, and the ability to sit down with a financial expert and discuss their financial goals.
In fact, one out of five Gen Z respondents said the most important consideration when choosing a bank is if they offer financial advice, guidance and readiness classes.
Q: What is the kind of information Gen Z are looking for when they speak in person to a bank?
A: Gen Z are looking for financial advice and guidance in the branch. With so much information out there now, it can be hard to distil down what’s most important. Sitting down and having your banker dedicate time to discuss specific financial goals and to recommend the best course of action based on your individual needs is hugely beneficial and most people recognise that.
Sixty per cent of respondents prefer to discuss options around important financial decisions such as mortgages, opening an account or choosing a credit card with someone in person at a bank branch.
Q: Why do you think when Gen Z trusts digital so much, they still want their financial affairs addressed in person?
A: Digital channels can be extremely helpful for certain types of quick transactions like sending or transferring funds or paying a bill. For the more long-term decisions that require financial savvy, creating a relationship with a banker or financial professional is just as important.
When it comes to advice, Gen Z, like most of us, want personalised advice. Digital channels are more transactional and not as personalised as speaking to a banker one on one. A combination of both strong digital and physical banking channels — including guidance and advice from a banker in a store (branch) — are essential to meet the needs of today’s consumers and particularly younger generations.
In fact, our survey found that 97% of Gen Z, 93% of millennials (those born between 1980 and 1995) and 93% of Gen X (those born between 1965 and 1980) are all more likely to visit a branch in person.
Q: Can you describe the practical measures you are taking to accommodate Gen Z’s needs?
A: We’re currently renovating and reinvesting many of our existing physical spaces with new layouts and formats, and new capabilities that encourage meaningful interactions and advice-driven conversations with our customers. We’re also investing in additional training and hiring more financial advisers across our store footprint to help deliver the advice and guidance we know our customers are looking for.
Additionally, we are delivering personalised advice that is relevant to each individual customer in creative ways by leveraging the latest technology to assist our bankers.
Q: How does Gen Z differ from their parents with respect to advice and guidance?
A: Gen Z’s parents had no other option but to seek out and receive financial advice in person. Today’s digital-savvy customers have the luxury of accessing an unfathomable amount of information, data, and resources just on their smartphone. However, it’s difficult to cut through that noise and drill down on what’s most important to the individual.
That’s why we’re still seeing a significant number of Gen Z who choose to bank with institutions that offer financial advice, guidance and readiness classes.
