- With inflation still on the rise, consumers are more strategic than ever about where they put their money.
- Consumers, especially Gen Z and millennials, want a financial services partner that offers personalization, interactive learning opportunities, and virtual customer service.
- Many brands already offer products that meet these needs, but many consumers are unaware of these features.
The financial services industry is in the midst of an identity crisis.
Ask consumers why they chose their car insurance, credit card, or bank account, and many won’t be able to provide a clear answer. According to a 2023 report from Google and Kantar, more than half of American consumers think all car insurance companies, deposit accounts, and credit card companies offer virtually the same services as their competitors. And yet, according to Kantar, 71% are willing to pay more for products that provide something that others can’t. That number is even higher for younger generations, like Gen Z and millennials.
As younger generations’ buying power increases, financial services companies must find innovative ways to market to a new generation of consumers — one whose values, preferences, and spending habits are rapidly evolving.
“We have seen an explosion of options within the finance services industry in recent years,” said Seth van der Swaagh, managing director of financial services at Google. “It has become increasingly difficult for any one brand to stand out amid so much competition. Financial services brands need to give consumers a reason to believe they have something unique to offer, both in terms of products and experiences, or they risk being left out of consumer consideration sets.”
What young consumers want
Millennials and Gen Z are smart, savvy consumers who understand that the rising cost of gas and groceries makes saving harder. They know the importance of building wealth, but they’re also willing to spend their money on goods, services, and experiences they care about.
Support at every stage of the financial services journey
More than half of consumers (52%) expect financial services brands to coach their customers. That number is especially high among millennials: 71% of consumers aged 28-43 want support from their banks, car insurance providers, and credit card companies.
“I definitely wish more companies educated people, because a lot of people don’t know enough about how to manage their finances,” said one millennial consumer.
In interviews, many expressed interest in the following features:
Not only do consumers want actionable and relevant information from their financial services providers, but they also want it delivered in an engaging and interactive way. More than three-quarters of consumers surveyed prefer consuming educational content on YouTube as opposed to via a traditional article.
An accessible, human-centered user experience
Educational portals and video libraries are only helpful, however, when they are relevant and easy to find. Today’s consumers want personalized experiences from brands that make them feel special. And when it comes to getting questions answered about their account or plan, most consumers would like the option to connect with a financial representative via a live video.
“I think video calls would be helpful and more accessible than having to go somewhere and meet in person,” one millennial respondent said, noting it should still be a personalized experience.
Other consumers expressed a desire for financial institutions to offer small incentives or rewards, like a gift card, for being a long-standing customer or for consuming content on financial topics.
Many financial services brands already offer solutions that address the needs and preferences of today’s consumers, but few are aware they exist or don’t know how to find them.
“The current economic environment has certainly fueled consumer demand for these types of solutions,” said van der Swaagh. “Back when providers first developed these offerings, I think many didn’t bother to promote them significantly, because interest wasn’t as strong as it is today. It has left them with a set of underutilized resources at their disposal.”
By building awareness and driving more traffic to these offerings, financial services companies can get in front of a whole new consumer-base — one eager to do business with brands that can help them make smart economic decisions.
“Sometimes differentiation isn’t about building something fancy and new,” van der Swaagh said. “Sometimes it is as simple as shining a spotlight on the resources you already have, when no one else is bothering to do so.”
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This post was created by Insider Studios with Google.
*Source: Google / Kantar, ‘Standing out in a Sea of Sameness: Differentiation in Financial Services,’ U.S., 2022, n=3,820 adults (survey fielded September to October 2022)
Kantar Monitor, U.S., 2022, n=2,000 adults, n=826 Gen Z & Millennial adults age 18-43 (survey fielded August 2022)
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