9 August 2022
Alex Young, Global Banking and Finance Review
As the cost of living crisis continues, the headlines are rightly focusing on the people in society who are taking the hit most severely: the lower earners, the elderly and those already in debt.
But it is, bit by bit, affecting everyone. Even those who felt protected from it by a hefty salary and a healthy savings account will be starting to question unnecessary expenditure and extravagant financial forward planning.
Businesses are switching up their marketing to attract shoppers with information on discounts and offers and, with one in six households now reportedly in ‘serious financial difficulties’, some banks are going the extra mile to help their customers.
But one demographic that is being forgotten about is young people. They may not be the biggest breadwinners or bill payers today, but they are growing fast. We define young people as anyone under 24, with those aged 16 and above labelled Emerging Adults. These are not only the mass consumers of tomorrow but the next generation of employees; the people who will define the future success of every business in this country.
And they are listening, watching and noticing. They see which supermarkets are doing what they can to help their family by not putting up prices of basic provisions, and conversely those retailers who diligently mark-up everything to ensure their profit margin is not affected. And they see how their parents’ bank is behaving in these difficult times – perhaps offering support when it comes to mortgage repayments and credit card debt, or ignoring pleas for help and only exacerbating the stress.
Banks must communicate with care
For young people banking is a dry, complex subject that is not easy to understand at face value. It’s not taught as part of the curriculum, on the whole, and is not something with which school leavers have had much interaction. If banks can change that by defining how they speak to young people in their language, on topics that matter to them, and in a tone that they will respond positively to, they will see a powerful change in how they are perceived.
In fact, the language banks use now could play a huge part in their future success. People are notoriously loyal to their bank – relative to other sectors – so those that strike the right note now could win over a huge number of young people very early in their banking journey, but they must engage them in an informed and considered manner.
Our research shows Gen Z feel unfulfilled: they are too often unhappy, lonely, lack confidence and are unsatisfied with life. They are uncertain about their purpose and place in the world, have anxiety about the future and find life less rewarding.
Young people are looking for a reassuring voice and a reliable steer. But they are also guided by their principles so relate to institutions and businesses who reflect their passions for fairness, equality and diversity, and respect their fluid approach to interests, views and identities.
We should also not forget that as well as being the customers of tomorrow, they are also future employees. Perhaps as a result of their disillusionment of the past few years, Gen Z place great importance on finding happiness in their careers. Their recent experiences have been far from satisfying, so they see their career as a way to make positive change over which they have some control.
Build a deeper connection with practical help and advice
The experiences of today’s young people are defined by a unique set of circumstances, from global and domestic divisions and economic uncertainty, the social and political implications of Brexit and, of course, the pandemic which caused upheaval for so many young people. The cost of living crisis is now exacerbating all this negativity.
First and foremost financial institutions need to establish how they can help during this time and what they can do that will have a real, tangible impact on people’s lives. They need to be clear they understand the unique experiences of this demographic, from their poor university or end-of-school experience, their concern about job prospects and the ongoing financial uncertainty.
For example, educating young people around financial issues, helping them feel informed and equipped to deal with their financial future will create a connection. Young people have a natural optimism and banks must speak to that, emphasising a brilliant future of limitless possibilities that await them, taking them on a journey of shared values. Given the strength of their position as an essential service, and one that can hold the key to a certain amount of life’s experiences, they are well placed to do this with authority and credibility.
Another way to indirectly tap into the natural optimism and positivity young people have is for banks to use their platform to celebrate life-affirming stories taking place in the world, while championing the causes young people believe in, promoting and encouraging positive change.
Finding an authentic voice is key
Whatever help and advice they offer, however they tap into the issues that matter to young people, the most important thing to consider is authenticity. This means finding and adopting an authentic voice as well as ensuring the sentiment expressed in any external messaging flows through the business is paramount.
Equality and fairness is something this generation feels passionately about but have lost faith in government and politicians to make a difference. As a result they are looking to businesses to fill that gap, using any power they may have to effect change. Financial institutions have the power and influence to join important debates, but it is imperative they only do so if they are doing their bit to bring about the change for which they are calling.
Young people can spot anything disingenuous a mile away and social media means they will shout about it, resulting in the opposite of the desired effect. A bank who shows they are on their side and fighting alongside them will earn their loyalty – possibly for a lifetime.
Finally, focus on face-to-face
With so much of life now taking place online – particularly over the past couple of years – memorable real-life encounters deliver more value and impact than ever. A bank that gets out into the community, partnering with educational establishments and connecting with young people through programmes and learning-based projects will resonate far deeper with that audience. Alternatively, finding a couple of causes or issues to support as a business and then investing in taking those out to people in a more memorable way will make its mark and avoid the risk of blending into the background of British banking.