Tink: Traditional banks struggle to meet Gen Z demands

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According to Tink, 57% of banking executives surveyed across the UK say that attracting young consumers is one of the biggest challenges they are facing.

The payment services platform’s research also found that approximately two thirds (67%) of banking executives say that attracting Gen Z is a vital part of future proofing their business, with 50% believing it is key to remaining competitive.

At the moment, research shows that traditional banks may be losing the battle, however. 

Tink found that nearly half (46%) of Gen Z consumers are already using third-party money management apps alongside their primary bank accounts, signalling a growing reliance on additional financial tools. 

Furthermore, 31% of Gen Z respondents indicated that their bank risks losing them as customers if digital tools and services are not improved.

In March, Thomas Byrne, Head of Product EMEA at nCino, spoke to Payment Expert about what traditional banks can do to up their digital game to prepare and accommodate for Gen Z customers.

In the discussion, Byrne explained that companies in all walks of life have started to push towards “gamification experiences”. 

Attempting to understand Gen Z preferences, Tink surveyed this demographic and found that they could be attracted to a competitor offering personalised support for financial goals (49%) or tools to manage spending (48%). 

Most importantly, Gen Z wants their primary bank to offer better visibility over their finances (57%) and assistance with managing the cost of living (55%). This highlights that practical support with daily financial management is a top priority for Gen Z.

However, one of the biggest challenges banks are facing is keeping up with the customer demand, leading many banks to partner with third-parties to solve this issue. 

Jack Spiers, UK&I Banking & Lending Director at Tink, commented: “More than ever, retail banks have an opportunity to focus their long-term strategies on keeping customers engaged. Continued strong competition in the retail banking market is offering consumers a myriad of options and providers to choose from. 

“Banks are understandably keen to attract younger customers and become their provider of choice throughout their lifetime. Therefore, many are focused on keeping up with evolving consumer expectations of this younger cohort, to deliver the digital financial management tools which will win them over. 

“To future proof their business in the long term, banks can invest now in upgrading their digital offerings. As competition grows from fast-moving challenger banks and third parties, greater collaboration with trusted third-party partners can help banks bring innovative products to market at greater speed and scale.”