According to Morgan Stanley, Gen Z is currently making more loans than any other generation, except Millennials. Gen Z will quickly become one of the greatest consumer demographics in the nation as it ages and enters the workforce in greater numbers.
We observe shifts in traditional consumer behaviour and tastes, which began with Millennials, and become increasingly more obvious as this unavoidable shift gets underway.
Take online banking as an illustration. These younger customers feel much more at ease doing financial transactions online than they would in a physical bank. They are more interested in efficiency and convenience than they are in whether a financial institution has a physical branch. Additionally, they are less likely than older customers to stick with the same bank for a long time.
So what can financial institutions do right now to maintain their position in this rapidly evolving digital-first environment?
More than ever, it is obvious that businesses must offer customers a customised banking experience that satisfies their specific financial demands while still being simple to use. These customers expect fast access to their own money as well as loans and other services at their fingertips, specifically on their mobile devices.
There has never been a better time for financial institutions to use digital technology solutions that can strengthen existing consumer relationships and aid in making the lending process as effective and advantageous as possible, both for the borrower and the bank, given the expectations of these new consumers.
Financial institutions might start concentrating on debt optimization and marketing automation right now to achieve these objectives.
An automated technique called “debt optimization” looks through the financial information of an account holder to see whether there is any consumer debt that may be aggregated or refinanced inside the financial institution.
An account holder, for instance, might be able to locate a lower mortgage loan rate or qualify for a mortgage that they might not otherwise be able to. Debt optimization offers the dual purposes of assisting consumers in obtaining the most favourable mortgage terms and enabling financial institutions to deepen client relationships by promoting additional pertinent products that assist in meeting each client’s specific financial needs.
With this type of technology, financial institutions can offer borrowers a more efficient and premium lending and home-buying experience. And these are exactly the services young consumers are looking for. Internally, the practice also helps financial institutions attract top talent in today’s challenging mortgage market.
Marketing automation, on the other hand, extends the basic idea of debt optimization.
Marketing automation technology allows banks to personalize specific loan offerings based on a consumer’s exact financial situation and specific needs. Marketing automation does not require account holders to have existing credit before receiving customized offers, giving institutions the tools to give consumers options before finding alternative solutions with competitors It differs from debt optimization in that This allows financial institutions to be more proactive in offering offers to a more diverse set of consumers and forestall personal financial crises.
Considering the enormous range of financial institutions and financial goods that are currently available to consumers online, maintaining a strong digital marketing presence is crucial for staying competitive. Digital marketing is a potent tool to reach these important audiences, especially those who might be doubtful that a financial institution is up to date with technology and accessibility. Customers need to be aware of all that a bank has to offer.
Financial institutions could use their digital platform to expand their presence among this important group, promote consumer experience technology, and draw in younger customers.
Financial institutions can enable the marketing departments of banks and credit unions to engage their current and potential customers with pertinent, individualised offers that may add value to their lives by utilising these technologies. Additionally, they can help institutions migrate to the modern banking industry’s increasingly digital environment by attracting young people who can spearhead the endeavour at these institutions.
The time has come for banks and credit unions to rise to this digital challenge, use the technology that will provide the most streamlined customer experience, and transform the financial sector to fit this new digital environment. They must make these improvements right away if they want to stay competitive—or even get ahead—or they risk losing out on talent and customers who seek out those top-notch experiences and career prospects with a company that has been quicker to adapt.
At MeridianLink, Inc., Chris Maloof is the president of the go to market. He is in charge of the company’s partners, sales, marketing, and product management departments.