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Get millennials, Gen Zs while young

Your future hangs on how well you attract tomorrow’s customers today

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  • Written by  Paul Schaus, CCG Catalyst Consulting Group
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  • Comments:   DISQUS_COMMENTS
UNconventional Wisdom is a periodic guest blog where the conventional wisdom is held up for fresh inspection, often with divergent recommendations. If you have some "UNconventional Wisdom" to share, email UNconventional Wisdom is a periodic guest blog where the conventional wisdom is held up for fresh inspection, often with divergent recommendations. If you have some "UNconventional Wisdom" to share, email [email protected]

They don’t have much money. They are paying off an average of $30,000 in student loan debt. A few too many are still living with their parents.

It’s true that many Millennial (born after 1980) and Generation Z (born after 1994) customers and prospects are not profitable for banks, at present. And because banks tend follow the money, they continue in their efforts to try to attract older—and more affluent—Baby Boomers and Generation X customers.

But here’s the rub—those older customers are set in their banking ways and difficult to attract. Only 3% of customers older than 55 and 10% of customers aged 35 to 54 switched banks in the past 12 months, according to Accenture’s 2015 North America Consumer Digital Banking Survey.

The number of millennials that have switched banks in the past 12 months is a striking 18%, according to the same research.

Remember the law of inertia

At first glance, those statistics may reinforce your philosophy that you shouldn’t worry about younger customers. Not only don’t they have money, but they don’t have loyalty to your bank.

If that’s your philosophy, you’re forgetting a critical physics theory that applies to banking: inertia. Inertia is defined as the resistance of an object to any change in its state of motion.

Older customers stick with your bank not necessarily because they love your bank; older customers stick with your bank largely due to inertia. It’s just too difficult to move multiple accounts and a bill payment infrastructure to another institution.

The process of switching banks is so time consuming that the Accenture study found that 81% of consumers would not switch banks even if their primary bank closed the local branch.

Millennials and Gen Z—who typically only have a single account—can switch banks more easily since they don’t have a financial infrastructure to unravel.


Millennials and Gen Z won’t be living in their parent’s basements forever. They are the future bread-and-butter customers for your bank. And the segment is huge, with millennials representing one-third of the U.S. total population. (And note that loyalty isn’t unknown among the younger generations. Accenture’s survey found that 33% said they will stay with their bank if they provide good online services. And 26% would stay with their bank if it charges reasonable fees.)

Introducing Gen Z

Not convinced that younger customers are the future of your bank? Consider the following from TD Ameritrade’s 3rd Annual Generation Z study:

• Gen Z values savings—57% feel that saving is very important at this point in their lives.

• If handed $500, nine out of 10 Gen Zers say they would save at least some of it.

• More than a third (36%) follow a budget.

They also want a home. According to a survey by Better Homes and Gardens Real Estate, 82% of 13- to 17-year-olds say homeownership is the most important part of achieving the American Dream. Most expect to own their first home by age 28.

Grow your own future clientele

Capture these customers when they are younger, before they begin looking for a mortgage and a 529 college savings plan and a 401k.

Offer them a service model that suits their current situation by offering reasonable fees and loyalty rewards programs. Educate them on financial topics such as saving for a home. Offer budgeting and financial management tools they can use. 

Once they start building wealth and using additional financial products, they will become more entrenched with your bank.

Put the rule of inertia to work—just make sure that it’s your bank that they won’t be motivated to leave.

About the author

Paul Schaus is president, CEO, and founder of CCG Catalyst. Contact him at [email protected] Follow CCG Catalyst on Twitter and LinkedIn.

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