Banking

Exploring untapped strategies to create Gen Z-friendly financial products with Publicis Sapient’s Mahesh Raghavan

  • Financial institutions are struggling to meet Gen Z where it is, with products, experiences, and messaging that resonate with the younger set.
  • That can change if FIs can think more creatively around data, personalization, inter-generational marketing, and other acquisition strategies.
close

Email a Friend

Exploring untapped strategies to create Gen Z-friendly financial products with Publicis Sapient’s Mahesh Raghavan

While much attention is focused on Gen Z’s preferences for financial products and the efforts of financial firms to engage this audience, what often goes unnoticed are the underutilized practices that can have an impact on building products and brands that Gen Z would like to embrace.

Mahesh Raghavan, Associate Managing Director of Strategy at Publicis Sapient, shared some strategies for financial firms, at the Tearsheet Gen Z Symposium held recently in NYC, aiming to develop services and products that resonate effectively with the Zoomer demographic.

Raghavan highlighted five key strategies that fewer fintech companies like Greenlight are effectively using to engage with the Gen Z demographic, which traditional firms are not fully leveraging.

Listen to the whole talk

Subscribe: Apple Podcasts I SoundCloud I Spotify I Google Podcasts

1. Personalization: Gen Z values products that are personalized and relevant to their interests and values. This highlights the importance of creating tailored offerings. One underutilized practice in achieving this, according to Raghavan, is the limited use of zero-party data. Unlike first-party data, which includes transaction histories and account details, zero-party data consists of preferences and information that customers willingly share with a brand about their attitudes and behaviors. 

“Leveraging zero-party data can be a goldmine for financial firms seeking to personalize products and experiences for this demographic,” said Raghavan.

2. Holistic loyalty strategy: The question that arises after discussing personalization is why customers would willingly provide their information to a firm, and how firms can encourage this engagement. This leads to the next practice: adopting a holistic loyalty strategy.

Traditionally, many firms approach loyalty in a siloed manner, focusing on rewarding customers for specific financial behaviors, such as using credit cards for rewards. However, Raghavan emphasizes that “loyalty goes beyond just financial transactions”. He shared an example of his firm collaborating with a large credit card issuer that also offers banking services to develop a loyalty and referral strategy, where Raghavan’s team is helping their client to look at loyalty broader than just rewards for financial activities and extending it to non-financial activities, too.  

“This is where it starts to tie in with the zero-party data,” said Raghavan. 

It involves engaging Gen Z through non-traditional reward systems, such as incentivizing participation in quizzes, surveys, and social media interactions with brands. Research indicates that Gen Z routinely engages in these activities. By extending rewards to such interactions, Raghavan believes firms can obtain valuable, consented data that can be utilized for personalized services in the future.

This approach can further be made meaningful by offering Gen Z choices and values that reflect their priorities, such as addressing carbon emissions, climate change, and mental health. 

“It’s not about just cashback or a discount at a retailer. The goal is to give back and establish connections based on values that resonate with their [Gen Z’s] priorities,” noted Raghavan.

This can be achieved through gamified experiences that make interacting with these topics enjoyable. By incorporating these themes into their interactions and gathering information in a fun way, firms can reward Gen Z for their engagement and alignment with important societal and environmental concerns.

3. Peer-oriented generation: This interaction with Gen Z also paves the way for another interconnected strategy, as highlighted by Raghavan.

Gen Z is highly peer-oriented, which means they value the ability to invite friends, view leaderboards, track progress toward shared goals and causes, and compare achievements within their circle of like-minded individuals. 

“Rewards don’t always have to be monetary; they can also include insights into how firms utilize the data they collect,” Raghavan underscored during the symposium. “This also emphasizes that it’s not just about offering rewards; it’s also about integrating these strategies into other financial products and services,” he said.

Savings goals, budgeting achievements, and other financial milestones can be integrated into leaderboards, gamified experiences, or contests to incentivize Gen Z’s participation.

4. Intergenerational engagement: Raghavan emphasized that the funding for these rewards doesn’t necessarily have to come from the providing bank or issuer alone. Similar to how firms can monetize insights, they can leverage approaches like those used by Greenlight, focusing on intergenerational engagement. 

This offers another avenue for connecting with Gen Z beyond direct engagement tactics. Given that Gen Z often chooses different financial services providers than their parents, traditional banks face a significant challenge in remaining relevant. 

“The impending intergenerational wealth transfer, estimated at $70 trillion over the next 10 to 15 years, presents a crucial opportunity and risk for financial institutions,” said Raghavan.

Studies show that 70% of transferred wealth leaves the firm, as younger generations prefer not to bank with the same institution as their parents. To address this gap, firms can set up accounts where parents match a portion of what Gen Z saves, fostering generational engagement and financial literacy. 

Raghavan believes, “This approach benefits both the institution and customers, turning these interactions into valuable teaching moments for parents in an influencer-dominated culture.”

5. Research, hypothesis, experimentation: After implementation of all these strategies, a critical question remains of how to ensure these products achieve commercial viability.

Unlike 15 years ago, today, all firms, including fintechs and startups, are at the forefront of innovation, according to Raghavan. He believes that every major and traditional firm is now eager to adopt practices that provide results. 

Raghav noted, “It begins with thorough customer research to synthesize insights and identify key features for implementation”. This is followed by usability testing of the product, with a focus on addressing any gaps or shortcomings. However, many research practices are moderated, which means that someone conducts the research, but behaviors may differ in real-world scenarios. “This is where experimentation becomes essential,” he added.

Experimentation allows financial firms to observe how customers behave in response to their hypotheses. Ultimately, every feature and innovation is just a hypothesis until it’s tested. Without testing, the commercial viability of a product remains uncertain, according to Raghavan.

“This is why some startups succeed while others struggle, and why certain product features developed by large firms thrive while others falter,” noted Raghavan. “The key difference lies in whether they tested their hypotheses effectively.”

0 comments on “Exploring untapped strategies to create Gen Z-friendly financial products with Publicis Sapient’s Mahesh Raghavan”

Banking, Financial Education

Banking on wheels: Fifth Third and SpringFour are taking financial wellness for a spin

  • Fifth Third has partnered with SpringFour on its Financial Empowerment Mobile (eBus), which brings banking products and financial health resources to underserved communities.
  • The partnership and relaunch of the eBus comes after a year and a half work involving a diverse range of stakeholders across the bank.
Rabab Ahsan | May 17, 2024
Banking, Lending, The Customer Effect

Unpacking the consumer impact of the Capital One and Discover deal

  • The Capital One-Discover deal may be driven by the complementary attributes of their customers, potentially leading to changes in product offerings and services to better serve consumers.
  • The combined entity could introduce a rewards based debit card as well as relaunch Discover's credit cards for SMBs. Beyond products however it is unlikely that the UX will change dramatically.
Rabab Ahsan | May 14, 2024
Banking

How banks and consumers are responding to the distant potential of Fed rate cuts

  • Earlier hopes of three rate cuts in the year are dwindling to uncertainty over whether any cuts will materialize at all.
  • The impact of sustained higher rates has already permeated banks’ NII as borrowing by businesses and consumers declined, coupled with higher funding costs for banks. Conversely, consumers are grappling not only with expensive borrowing costs but also with a significant portion experiencing loan rejections.
Sara Khairi | May 10, 2024
Banking

Fewer branches and loan products are amplifying customer turnover for CUs

  • Despite the rise in digital banking adoption, consumers are reluctant to entirely abandon traditional brick-and-mortar branches and face-to-face interactions, particularly those who primarily use CUs for their financial needs.
  • CUs may risk losing customers, though, to banks that often have more branches and ATM networks, better online and mobile app technologies, and a wider range of products.
Sara Khairi | May 03, 2024
Banking

“Collections is not something that you do to somebody. Collections only works when it’s collaborative”: Jeoffrey Begin, Head of US Collections at BMO

  • Jeoffrey Begin, Head of US Collections at BMO details how the bank has changed its focus in Collections away from a single transaction and towards the customer.
  • The customer-centric approach to Collections allows the bank to build consumers' financial health but it also requires them to be responsive to changes in their behavior due to factors such as technology.
Rabab Ahsan | May 01, 2024
More Articles