Modern Marketing, Podcasts

Marketing financial services to Gen Z with Step’s CJ MacDonald and Visa’s Ruben Salazar

  • FIs are beginning to wake up to the importance of Gen Z as an emerging customer. But they don't necessarily know how to reach them and what to say.
  • We speak with Visa's Ruben Salazar and Step's CJ MacDonald about what's working in marketing to the young generation as part of our podcast series on Gen Z.

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Marketing financial services to Gen Z with Step’s CJ MacDonald and Visa’s Ruben Salazar

The eldest Gen Zer was born in the same year Instagram was founded. Gen Z has always lived in a world with social media.

Surrounded by tech tools and platforms means reaching Gen Z constitutes a challenge for financial firms. The language and ways that worked on their parents probably won’t work on Gen Z. This calls for bringing new strategies, communication, and advertising into play in ways that resonate with this generation

This episode is part of a special series on Gen Z and financial services. We’re really trying to get to the bottom of this next generation.

To dive deeper into how financial firms can better market to the younger demographic, I brought in two of my favorite people here to talk about this subject here. We’ve got CJ McDonald, CEO of Step. and Ruben Salazar, who runs Visa Direct, addressing the following questions:

The big points about marketing to Gen Z

  • What makes Gen Z generation unique?
  • What kind of challenges does serving this generation raise for financial services?
  • What do some firms get wrong marketing to Gen Z? What are common mistakes?
  • How does this uniqueness impact your firm’s marketing? product development?
  • What brands do you look to outside of financial services that nail marketing to Gen Z?
  • How does your business serve Gen Z today?
  • What are Visa and Step doing to serve them better in the future?

Tearsheet thanks our sponsor Publicis Sapient for their ongoing support of this series. To download research reports into the opportunity to better serve this generation, go to

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The following excerpts were edited for clarity.

Gen Z: ‘A generation of hustlers and entrepreneurs’

CJ MacDonald, Step: I think, you know, ultimately, Gen Z is a generation of hustlers and entrepreneurs. The younger demographic has grown up with these tools that automatically offer instant gratification. I’ve got a six year old son and a 10 year old daughter, and it’s like, Daddy just ordered it on Amazon, and it’ll be here later today. Or, you know, Daddy, we need groceries, can you call Instacart or I’m hungry, let’s get DoorDash. They’ve got very high expectations.

I think that they’ve got a really strong lens and filter around things like ads, and they want, especially from consumer brands, something that’s authentic, something that’s organic, and they want to be able to make their own decisions. They don’t want their parents telling them what brands that they should be wearing, or what brands they should be banking with. They are truly independent. I think about when I was growing up — I was like, Mom, Dad, what should I do in the banking world, and my parents brought me to Wells Fargo and opened up a bank account. I kind of looked to my parents for trust and inspiration.

Gen Z: Digitally-native from birth, generous with data

Ruben Salazar, Visa: This is the first generation that is 100% native digital. They are not only highly connected, they are hyper connected — they are using three to five devices and check social media 100 times per day, but they are also highly dependent on digital to run their life. Technically, their entire life runs on an app: their friendship, their love, their education, their job, their relationship to money — everything is running on multiple apps and devices.

I believe this generation is so open minded and so welcoming to so many different technologies, that they are easily giving away their privacy and their data. That data is an amazing thing for firms like Step and other authentic, legitimate companies.But that data is very dangerous in the wrong hands, in the hands of fraudsters. We ran a survey with Morning Consult and what we found out is parents are really concerned about Gen Z’s easiness in which they share this data. I think that creates a significant opportunity for companies like Step and Visa to create very robust platforms that also create a safe and secure environment for them to manage their money.

Challenges to reach Gen Z

Ruben Salazar, Visa: I think the largest challenge is to understand where they are in terms of adoption of technology. I think the traditional 1-800 number approach for them is not going to work. The entire experience needs to fit in a mobile app. That will mean that the banks who wants to attract these new consumers will need to think digital-first and that will transform banking into a omni channel value proposition. This consumer probably wants to start her transaction in a Play Station and finish the transaction on the web. And you will need to follow them as they move from device to device to fulfill this thing.

How are you going to create the the layer of securities that are important for them and to keep them in a safe environment when they shop online or move money or perform any other financial transactions? 53% of the parents believe that their kids are exposes to financial fraud, because of their pervasive use of social media. They also believe that their kids will be exposed to false sorts of financial advice, because they trust giving their data so easily, signing up in so many places that they lose control of where they’re actually having this conversation.

CJ MacDonald, Step: Most of this generation doesn’t want to talk to anybody — they want to be able to chat or they want to be able to self resolve issues. But in order to do that, you need to innovate, you need to staff differently, you need to manage expectations, as well as the customer. Traditional banks are open Monday through Friday, nine to five, and some of them might have occasional hours in the morning on Saturday. That doesn’t work for this generation — they’re in school or they’re working during those hours.

And so they want to be able to ask questions about their money at eight o’clock at night, which means, for a brand like Step, we have to staff for that. And then we’ve got people on the East Coast on the West Coast. I think about something like our customer service hours where we are operating essentially from 4am Pacific Time until midnight Pacific Time, which gives us a little four hour gap for people to sleep. That is not normal for a card company or for financial services, where it’s typically nine to five.

Mistakes made trying to reach Gen Z

CJ MacDonald, Step: Personally, when I was going to spend the next 10 plus years of my life building a product and building a brand for a demographic, I surely didn’t send out a research team, or make assumptions about them. I actually wanted to learn firsthand what Gen Z’s pain points were. I personally went to the movie theaters on Friday night at 6pm for three months straight. I personally went to Starbucks after school at 2:30pm, near a school, when all the local kids in high school were going to hang out after and get $7 frappuccinos that are full of sugar as well as $7. That starts to add up on a monthly and a yearly basis, but that’s what these kids have grown up on.

I think not really understanding the demographic and the customer like that was one of the most powerful learning experiences for me was to go watch firsthand and then start to do focus groups and talk to them. As much as I was curious about what their financial services setup looked like, I also wanted to know what clothing brands they were they wearing and what music they were listening to.

They’ve got these different slang words and stuff that you have to understand, so then you can lean into it, and you can build a brand and product around them. I just don’t think that a lot of brands take the time to truly understand who their customer is. I don’t think that banks do it — they just take their app that they’ve had and they just reskin it and say, Oh, this is for college students. And it’s not really what the college students want.

Conversations starters, not just content

Ruben Salazar, Visa: I guess one additional observation: when you are developing marketing campaigns for this segment, some brands make the terrible mistake of just creating content and content and content. This segment is incredibly savvy, they take eight seconds to decide if that content is relevant or not for them go decide to engage instead of reading content. Companies should be looking to create interactions with them, and trying to really understand what the drivers and motivations are for this generation to trigger decisions on financial matters.

So, I think it’s one thing is to be present in the channel, but being present in the channel where they are without purpose — without the interaction mindset — then it just going to another piece content. It’s just this instant reaction to what you’re trying to communicate to this audience that creates the difference between great execution and very poor execution.

Paving the road to Gen Z’s financial literacy

CJ MacDonald, Step: We’re targeting a younger demographic of teenagers and young adults, and we truly want to build financial literacy. We want to build a product that is safe and secure. But, on the same token, lwe want to go where our customers are. They’re on social media, they’re on their phone, they’re not watching TV traditionally, like we used to. It’s now like, how can you create authentic organic content that gets your message or your brand somehow in front of them, but also has some authenticity and more of an organic feel. We create content internally, and some of the content is fun and engaging. And some of it’s educational, and some of it has brand awareness, and some of it doesn’t, because we’re trying to just have a conversation.

In our world, it’s around life and growing up and financial awareness and financial literacy. We create content on TikTok, YouTube, Snapchat, and Instagram. We are going where our customer already lives, and trying to be part of tha conversation or be part of that day to day, but striking that balance of not throwing an ad in their face and not repeating an ad in their face, but trying to just be cool. And trying to be motivational and relevant is something that we’re doing our best to do.

Doing more with less

CJ MacDonald, Step: With a relatively small marketing budget, a relatively small team, and limited resources, we’ve tried to penetrate and create and launch a brand from nothing.

If you think about it, we haven’t even been in market three years yet. We’ve got limited capital compared to any large traditional bank or large, traditional credit card company, so we’re not going to outspend them. We need to outrank them and outsmart them. And we have a long way to go, but in less than three years, we’ve got almost 5 million customers on our platform, and we’ve got a really good v1 product, and it continues to get better, and we add features.

Brands that get Gen Z right

CJ MacDonald, Step: There’s a water company called Liquid Death. It’s water in a can. And I think they’ve just done a phenomenal job marketing. They really leaned into the demographic and their customer. A lot of Gen Z aren’t super large drinkers and into alcohol. And so here’s this fun water brand that you can walk around to party or a concert and, if you don’t want to drink, you can. It’s got this sort of metal feel to it and it’s edgy, and it’s fun. And, it’s actually good water. I think they’ve done a phenomenal job marketing water in a can. One of the founders is actually a buddy of mine, and I go to all these conferences, and he’s literally walking around with a backpack handing out cans of Liquid Death water.

I think about other brands, like MrBeast. He’s got his burgers and chocolate. He’s got a large following, but he’s built these multimillion dollar brands really just targeting this younger demographic. You think about Prime, which is an energy drink that Logan Paul put out and has a relatively large following, but leaned into it and has hit this younger demographic and generation. Kim Kardashian has her SKNN brand and there’s all these people that have come out and specifically built product or brand aiming at the younger demographic and younger generation. A lot of have done a really good job just understanding who their customer is staying focused.

Ruben Salazar, Visa: I kind of admire Patagonia. There’s this new awareness of recycling your clothes and to take care of the clothes in a different way. They are so relevant today. The fact that they are teaching our kids that resources aren’t infinite and one small change in behavior can have a deep and meaningful impact in the rest of other people’s lives is just a fantastic way of engaging in creating purpose for its brand. It’s relevant for the kids today, and it’s relevant for people like me, so it is just a great transition between generations, which is hard.

Nike continues to do a terrific job of showing the resilience of athletes to show the pursuit of your dreams, and you see kids and teenagers still really engage with the brand. The fact that they use sportsmanship to create more acceptance — it’s an inclusive narrative. It’s also a very attractive message out there.

Working with Gen Z in the future

Ruben Salazar, Visa: In the next two or three years, Gen Z will be like 64% of the older population. And then we are going to face a consumer that will be highly dependent on e-commerce for everything. So creating the right conditions for the brands and the brands of our partners to live in that virtual commerce environment will be critical. We continue to make significant investment in artificial intelligence every year — we prevent more than $25 billion in fraud just to make sure that these networks remain secure. We issue like 5 billion tokens already around the world and tokens provide a way for people not to give away their real payment credentials, but to protect, regardless of where they want to have their credentials.

The babies of the next two or three years will be born in the era of ChatGPT other evolved artificial intelligence, but it’s this generation, Gen Z, that as a nation, will shape the way we’re going to use AI in the long term. So it’s important for us to create this responsibility around these new technologies in the long term. And I believe whatever we can do in the payment and money movement environment to keep this transaction safe, it will be a great addition.

CJ MacDonald, Step: We want to be that first bank account, we want to be that first spending card, we want to teach Gen Z. We don’t want them to run up a bunch of debt, or damage their credit. We created a product and a card that helps them establish credit at an earlier age and has guardrails on it. We offer them a credit line in some cases where they can start to build credit and use credit more responsibly. On the investment side, we offer the ability to buy stocks and crypto.

From a product perspective, we’re constantly thinking about the future and what the future is going to look like and how we can build those products, services, and features to tailor it to Gen Z and their everyday needs.

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