By Grant Langford, Q2 Strategy Intern
The move to digital is by no means a new trend, but its pace is only accelerating. Watching TV, ordering food, and even dating in the digital channel are no longer novel experiences – they’re quickly becoming the default mode for many of our most important activities. The COVID-19 pandemic has sped up this conversion, and banking is no exception.
As a senior in college completing an internship at Q2, I’ve witnessed this process unfold in a remarkably short time. The overlap of the existing move to digital and the stresses caused by the pandemic have forced many financial institutions (FIs) to reevaluate their digital strategy quickly. The time I’ve spent learning about digital banking on Q2’s strategy and marketing team has made one thing clear – FIs that are working to increase their digital offerings aren’t necessarily getting ahead; they may, in fact, just be starting to catch up with the demands of their account holders. The following are a few of the observations I’ve made regarding digital banking from a younger generations’ perspective.
Digital Banking is no longer optional
Millennials and Gen Z have proven to be huge markets for, well, everything. Each of these generations is comparable to the Baby Boomers in number, quickly becoming the most important new markets for FIs to capitalize on. Quick and convenient digital banking solutions used to be “nice” options for an FI to offer. Now, they’re essential. If a solution isn’t fast and easy, the likelihood that a Millennial or Gen Zer will adopt the solution in the long term decreases dramatically. Everything we use has already been streamlined and optimized for convenience, and digital banking isn’t an exception.
Millennials and Gen Z follow these trends
- User Experience that provides instant gratification has become a trend in tech; if a user experience is too difficult to learn or navigate, its adoption isn’t likely to be high. Millennials and Gen Zers expect banking apps to provide the same kinds of high-quality experiences we expect from Apple or Amazon. For FIs, this means making clunky, cobbled-together experiences visually appealing, seamless, and low-friction.
- Person to person (P2P) payments have also become a significant trend in the fintech space. Whenever a friend or colleagues tells me they don’t use Venmo or Cash App (or a service like it) I am genuinely surprised. Having an easy way to quickly send funds to your friends is as common as having a debit or credit card to access those funds. The apps are all simple to set up, easily to navigate, and provide a single service correctly, every time. The more FIs that implement services like these the better prepared they’ll be to tap into the Millennial and Gen Z markets (while positioning themselves to provide more products and services while building loyalty).
- Security, like user experience, is another component of digital banking that younger account holders take for granted. If an FI has a mobile app for customer use, I automatically assume my accounts are protected without researching its security features. Just one data breach would be enough for me and my friends to drop the app for good.
Q2’s focus on meeting these expectations
Millennials and Gen Z are just the latest generations to demand different kinds of services. Generation X and the Baby Boomers demanded enhanced, upgraded experiences, and future generations will no doubt look for better, faster offerings from their FIs. During my internship at Q2, I’m comfortable making another observation – Q2’s history of innovation, paired with its commitment to building stronger communities by strengthening their financial institutions, will continue to meet, and hopefully exceed, the demand for these improved experiences.