How Greenlight and Mastercard build trust and market to Gen Z

Welcome to the Tearsheet Podcast. I’m Tearsheet’s editor in chief, Zack Miller. This episode with executives from Mastercard and Greenglight on building trust and marketing to Gen Z is part of a special podcast series where we explore the fascinating Gen Z deeper: their relationship with money, how they like to save, spend, and borrow money, their fears and aspirations, and their connections to social issues. 

Tearsheet thanks our sponsor Publicis Sapient for their support. Read more and download customer research about Gen Z and financial services at Steez  

For this episode, I’m joined by Mastercard’s Sherri Haymond and Greenlight’s Matt Wolf. We’ll put some thought to qualify and quantify the opportunity to better serve the younger generation and how both firms are positioned to do so. We’ll chat about why Gen Z is an important generation and how Greenlight and Mastercard embed this generation into their design and experiences. Financial education and trust building are particularly important to establish to win over Gen Z – we’ll explore those things, too.

Here’s my conversation with Matt Wolf and Sherri Haymond.

Summary

• The opportunity to better serve the younger generation
• Why is gen Z an important audience? 
• How Mastercard and Greenlight embed this generation into their design and development
• Working with partners to serve Gen Z
• How Greenlight thinks about designing financial education programs for younger generations
• The need for trusted financial content
• Building loyalty with younger customers

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The following excerpts were edited for clarity.

Gen Z’s financial habits and aspirations

Greenlight’s Matt Wolf: Everything we do has this customer in mind. The younger generations expect a mobile banking experience that’s seamless to use, is authentic and engaging. It’s expected that there will be close to 43 million Gen Zers that will be using mobile banking by 2025. There’s a massive opportunity to better serve these younger customers. At Greenlight, we’ve actually started to build really deeper partnerships with banks and credit unions, in addition to being able to offer Greenlight directly to Gen Z and their parents themselves. beacause these financial institutions recognize that creating compelling mobile experiences isn’t really necessarily a core capability of theirs.

Our solution for banks aims to help that FI better serve that next generation through what is a really mobile first banking and education experience. Financial education is very important and something 93% of teens believe they need to achieve in order to get to their life goals. And almost 100% of parents, not surprisingly, agree. We also find financial education is the number one life skill that parents don’t feel equipped to teach their children. Schools really aren’t helping. Still only 23 states require a personal finance course. On average, students and teens score 64% on National Financial Literacy tests. So like I said, everything we do at Greenlight is really to help parents raise financially smart kids. To do that, we devised our solution to be really comprehensive with a full suite of financial services. So kids can earn, save, spend, give, invest, and build credit.

Mastercard and Gen Z

Mastercard’s Sherri Haymond: Mastercard is a company that’s really focused on empowering economies and empowering people. That’s actually our mission statement. From the very beginning of when we started working with fintechs, it’s one of the things that made it a very obvious match — Mastercard and fintech go together. We’re actually known in the industry for our partnership approach. The reason that it’s such a good fit is that we are mission-aligned with a lot of these fintech partners, Greenlight being an awesome example. Empowering kids and teens with financial education and empowering their parents to build access to credit — these are all things that we are extremely committed to.

We’ve been at this for many years, way before it was cool to focus on ESG-related activities. Our focus was on financial inclusion, first outside the United States and then later, here as well. Partnering with a company like Greenlight, where the values and mission statement and who we’re trying to serve is exactly aligned, it gives us really great opportunity. First, we get to really understand from partners like Matt what their customer needs. It helps create this amazing back and forth where we’re understanding from our partners directly, because obviously, we don’t go direct to consumer. We are a B2B2C company. And we do that through partners.

We do have our own research, of course, as well. But we really listen to our partners and understand what capabilities they need from us to build to power them. We also then provide a network of support. Fintech can’t do this alone — we have a lot of elements that are pretty critical to their success. Together, it creates a flywheel effect of goodness that we’ve really been able to grow.

Gen Z as an important audience

Mastercard’s Sherri Haymond: Gen Z is the biggest generation by far. They grew up in a very different time than all of the other generations that came before them. They are digital native and social native. They actually care a lot about what companies do. In research that we did over the summer, we found that many Gen Zers would actually leave a brand, or do leave brands, when they’re not happy with the contributions that that brand is making to society or how that company acts in society. This has always been something that we are very focused on. We’re keenly aware of it.

Our research also showed 74% of them didn’t think that they would work in a traditional job when they grew up. And instead, they are taking advantage of this digital upbringing to do things like participating from a young age in the Creator Economy, going on YouTube and learning about how to start a business and then going ahead and starting one. Some college students are doing gig work on the side. It’s an interesting thing to see that this younger generation is just really focused on a very different definition of what a career could look like, of what fulfillment means, of what passions they have, what they’re allowed to have, which things are allowed to go together. It’s very important to us to really make strong connections with this segment across these different dimensions. And it’s with partners like Greenlight that were able to really get at it that way.

Gen Z and financial education

Greenlight’s Matt Wolf: We’ve really continued over the years to expand the suite of banking, education, and even safety products that we deliver to drive more value for Gen Z customers and exactly meet those evolving needs. In January, we launched our first mobile financial education game called Level Up. It’s an interactive, curriculum-based financial literacy game within our app. And it includes really fun, engaging animated videos, quizzes, and mobile games that tie in questions around lessons that the kids have learned. We developed this curriculum based on the national K-12 standards, but broken into these really fun bite-sized levels that teenagers are accustomed to consuming content.

Also last year, we launched what we call Greenlight Infinity, which is a higher tiered subscription plan, really designed to help parents power their teens independence with not just financial features, but also safety features. So things like location sharing, SOS alerts, crash detection with automatic 911 dispatch. These are probably the type of things when I was in high school, I wouldn’t have loved at first glance. My parents wouldn’t know where I was all the time. But at the same time, I think it makes parents feel like they can give more independence to their kids — I certainly would have liked that way back then.

Last thing, kids are really self aware, which I certainly was not many years ago. And part of that is people see how important building credit is. Because when you go to buy your first car or rent your first apartment, you need credit. You realize, wow, I don’t have any — it’s really important. And it’s something we heard serving millions of kids that use our product regularly. So in partnership with Mastercard we just launched an industry-first credit builder for teens to help them build credit before they’re 18. Parents can add a teen as an authorized user to the Greenlight Family Cash Mastercard, and they can actually start to build that credit and learn to really manage credit responsibly.

Embedding Gen Z into products

Mastercard’s Sherri Haymond: Serving Gen Z is really through our partnerships. At the end of the day, we don’t go off on our own and create products in a vacuum. What we do is through constant engagement with our partners and their end user customers who are Mastercard card holders, together with research and panels, we try to really get a good feel of what customer needs are in specific segments. So in the case of Gen Z, we talked about what some of those unique aspects are and then we work really closely with a partner like Greenlight to innovate on whatever the current stack is, whatever the current product is.

Sometimes we do engagements with our data and services organization or spark sessions, where we look at a value prop and we together figure out what could be next. Sometimes it’s not that formal and it’s more organic, but either way, we’re getting feedback from the market constantly about what the needs are for a segment like this. And hopefully we’re building on some stuff we’ve already been doing. I mentioned before products that we’re innovating on in the area of entrepreneurship, small business, independent workers or entrepreneurs, creators — tools to build their business and succeed, or enabling partners like Greenlight or a bank partner to use alternative data, to provide access to credit where it may not be so obvious that a thin file person, even a parent, why credit should be extended to that person. If you look at things like alternative consumer-consented financial data, you’re able to, in a different way, put together that credit history, and then the bank is in a better position, potentially, to extend credit.

Gen Z wants financial education from its FIs

Greenlight’s Matt Wolf: It won’t come as a surprise to anybody with kids and teens, but they’re not going to sit down and read a personal finance book. And it can be really difficult to discern misinformation across social media. I saw a Qualtrics study recently that said over 50% of Gen Z turned to TikTok for investing. There really is a serious need for trusted educational content that will definitely resonate with these younger generation.

I mentioned our financial literacy game called Level Up. It really does translate what we think is a best in class curriculum that we created ourselves. We have a whole team of certified financial educators that wrote this curriculum. And we have some partnerships that helped cement that material as well.

We recently did a nationwide survey of working parents in Q1 and found 93% of parents said they actually think it should be their financial institutions’ responsibility to teach financial education to their kids, but only 16% of parents said that their financial institution does that. Now we know that every bank or credit union you talk to has some sort of financial education resource, but it’s not, for whatever reason, resonating with the kids. It’s not resonating with the parents.

Greenlight working with banks to serve Gen Z

Greenlight’s Matt Wolf: Credit unions like Community Financial Credit Union or Country Bank get the full suite of Greenlight’s core capabilities: our family digital wallet, the debit cards, the financial game, the ability to assign chores to your kids and then automate allowance through this partnership, and then the customer.

When we look at how is it that Greenlight can be in this position to have the right to play here, 71% of this generation, in our surveys, say that they expect brands that they work with to understand them. 62% expect brands to empower them. This is really core to empowerment: teaching kids and teens the basics about how to navigate finances. And by the way, even if it does come through the TikTok channel, getting that information through a trusted brand. That’s exactly what this generation, these kids and teens, are looking for. Greenlight is a brand that they trust. We also know that Mastercard is a brand that they trust.

Connecting at the values level with Gen Z

Greenlight’s Matt Wolf: I think it really boils down to a couple things: are you solving a real problem for them? Because if you’re not, they might try something, but they’re going to walk away. They’ll see right through it. They totally do. And are you continuing to provide more and more value, are you continuing to innovate and make added product features and enhancements that make it more valuable for them?

We’ve got 500 people that are only focused on helping parents and Gen Z and Gen Alpha have more financial freedom and independence, all within a safe environment. II think it really comes down to continuing just to meet this generation where they are. I mentioned Community Financial Credit Union in Michigan earlier, and through this partnership with Greenlight, they’ve done a really cool job of creating social video posts on Instagram and TikTok, with their CEO and her daughter, who’s a big Taylor Swift fan. That was part of the story that they were telling about how they use the Greenlight card and savings to save up for the small fortune it will cost to go see the Eras Tour this summer. They do a great job of using social media to promote.

Mastercard and Gen Z loyalty

Mastercard’s Sherri Haymond: This generation seeks out memorable and immersive experiences. MasterCard was the first company to come out and say that experiences matter more than things, when saying that was a big risk. And now, it seems so obvious to everyone: 78% of Gen Z say that they’re more likely to choose a brand that exposes them to new sensations and experiences. And at MasterCard, we are all about that. We’ve been evolving the priceless platform to bring new experiences, and also bring new products to market. We have sonic branding, sensory experiences that we create. We even introduced a touch card, that helps people that have sight limitations be able to understand what products they’re using. This generation is actually kind of a perfect generation for us to lean in to from a product and brand perspective, because it is the kind of wants, needs, and desires and the things that Gen Z prioritizes that are exactly the things that we’ve been prioritizing for many years. So, leaning into this generation is a really exciting opportunity for us.