In 2024, banks will continue to face a problematic growth environment due to macro and microeconomic headwinds, political instability, and consumer shifts in switching behavior that make customer acquisition more challenging. The first two are not controllable. However, banks have an opportunity to go beyond digital transformation and customer journey simplification to better connect, convert, and retain younger consumers. To do that, they need to rethink their marketing strategies to be more relatable to the fastest-growing cohorts, Millennials and Gen Zers.
Through years of working with some of the largest financial services brands in the U.S., we have gained a deep understanding of the young banking consumer and learned how to design experiences and communications that effectively engage and persuade.
One of the biggest challenges in connecting with the digital-first generations relates to a social media dichotomy. These consumers prefer social media channels to learn about financial services and brands. Given their high distrust of traditional banking brands, they find social media more relatable, believable, and trustworthy educational content. But at the same time, social media is the biggest driver of millennial and Gen Z “money dysmorphia,” a feeling of financial inadequacy (even if they are doing relatively well). This distorted view of personal finances is more prevalent among younger adults. According to a Credit Karma Survey from December 2023, 40% of Millennials, 25% of Gen Xers, and 15% of Boomers are affected by it. “Money Dysmorphia” can make consumers step away from planning and make money missteps, including overspending or risky investments.
So, how can brands effectively leverage digital-first marketing to connect authentically, address distorted views, educate about solutions, create financial well-being, build trust, and ultimately convert customers?
There are three key strategies that banks need to implement.
First, build a community leveraging both social channels and culture-first experiential activations. They must deliver a modern brand representation, integrate technology seamlessly, showcase shared values, and focus on building emotional connections. To scale, the in-person experiences must be designed to drive social conversation. Although leveraging sports sponsorship assets and influencers is viable, we believe innovative and straightforward creative ideas are cheaper and buzzworthy. While working with a bank with coffee shops for its clients, we designed experiences that connected through passion points, incorporated product education seamlessly, and drove social sharing and digital engagement.
Second, educate in relatable terms and leverage gamification to increase financial wellness and literacy. Young consumers have significant concerns surrounding student debt, savings, and retirement. To educate a new audience, the rise of financial services apps such as Acorns, Stash, and Robinhood drastically changed expectations.
Third, brands must use data and technology to maximize experience personalization (while complying with all regulatory limitations). Experiences can leverage technology in fun and engaging ways without tapping into PII. We have used technology with a leading bank to recognize and celebrate high-performance employees with personalized activation experiences that drive high engagement and satisfaction. Brands need to get smart about using AI and not be shy about modernizing engagement strategies.
These strategies can help drive acquisitions. We have recently conducted Elevation Workshops with two leading financial services banks: a regional bank and a leading credit union. The workshops combine our data and research in the category with a team of senior strategists and creatives who ideate with brand executives to define growth strategies targeting 18-to-34-year-old consumers. We continue to offer these workshops to a select group of brands in the financial services category.
