iGen, also known as Generation Z, may be young, but that doesn’t make them any less opinionated than their Millennial predecessors. However, iGen’s preferences for everything from the clothes they wear to what they’re looking for in a job are already proving to be vastly different than those of Millennials. And iGen’s money preferences go deeper than merely what they buy—they already have specific inclinations about how they bank.
A recent article from the Financial Brand reported new findings from the 2015 TD Bank Checking Experience Index, which showed that iGen might soon make the “bank” in the most traditional sense a foreign concept. Even using a bank’s website to pay bills and check accounts online is outdated to them; they much prefer using mobile banking through an app on their smartphone.
While the idea of banking from a smartphone might make older generations break out in hives, it’s a no-brainer to people in the iGen generation, who essentially live their entire lives through their handheld screens. TD Bank’s research found that 41% of iGen (aka Gen Z) consider their bank’s mobile app as “essential,” whereas only 22% of other respondents in the survey feel the same way.
Wary of debt, this new generation may also be snubbing their noses at credit cards. According to the research, nearly 75% of these budding financial consumers describe their debit card as “essential,” compared to 56% of Americans overall.
“Financial institutions can expect Gen Z’s preferences to be similar to those of Millennials,” says Nikki Waters, VP of Consumer Marketing at Fiserv. “But Gen Z’s tolerance for financial institutions that don’t grasp their need for fast, easy, intuitive and personally relevant communications will be very low.”
So where does that leave banks and credit unions? If TD Bank’s findings are any indication of how people are thinking about where to keep and manage their money, banks and credit unions might be in trouble if they don’t start catering to iGen’s preferences. This doesn’t mean that extreme changes need to happen immediately or that complete business models need to be overhauled. But the banks and credit unions that start introducing tech-friendly advancements now will likely be the ones to win in the long run.
What are your banking preferences? How do they compare to iGen’s? Tweet us at @JasonDorsey and @WhattheGen to join the conversation. And don’t forget to include your #generation!