How Millennials and Generation Z investors are changing the banking industry
Millennials get a lot of flak from their older counterparts from Gen X and the Baby Boomers. Complaints of younger people being entitled and lazy are common. But, the one thing that can be seen across the board with the Millennial and Generation Z generations is that they are much more conservative with their investments than their predecessors.
There is a signature attitude that is developing in the younger adults of today — that wealth is not the only signifier of personal success. Millennials are more concerned with quality of life and less about building their fortunes. Unlike earlier generations, people are waiting longer and longer to buy their first homes or to get married.
This shift in philosophy, that it’s better to wait and gather experiences in life rather than wealth, is already having an impact on the financial sector. Companies are being forced to change their operations and employee expectations to accommodate the newer generations.
Right down to investment banking interview preparation and recruitment techniques in many sectors, companies are struggling to figure out how to make their employees both happy and productive.
We will be discussing just some of the changes that we are seeing in the banking industry as Millennials mature and the next generation comes of age to start building their investment portfolios.
Larger companies are finding it hard to find qualified candidates to fill many of their top positions. It’s not a lack of education or initiative, but a definite shift of younger workers avoiding larger corporations. Millennials want to feel as though they are making a difference in their careers, and getting swallowed up by a large conglomerate is not an attractive draw for many.
More small businesses and entrepreneurial ventures are being headed by innovative Millennials and Gen Zers. The drive to run their own companies instead of working hard to make someone else’s dreams come true is a powerful new trend.
Investment banking companies have recently been advertising their open positions on social media platforms to try to draw in more candidates. This is an approach never before tried by their types of influential firms. Flaunting their charitable projects in the hopes of drawing in the more philanthropic workers is also a new approach to recruiting.
Millennials and Gen Zers have grown up surrounded by technology which means that businesses — including banking institutions — must get online is they want to stay relevant. Developing new phone apps that are easy to use and mobile-friendly is a trend that has started in large part to accommodate this younger, more tech-savvy generation.
Although most Millennials are used to sharing much of their social lives online, they still expect to get the best in security protocols, especially from their banks. Upgraded security and data protection have become a real concern and focus of modern banking.
Drawing in customers
Banks and investment firms used to be able to draw in new customers by relying on their reputation, incentives and clever taglines but, no more.
The Millennial generation has had a front-row seat to the financial crash of the past decade. Many young people witnessed their parents or other family members lose everything as their investments turned to ashes. This has created a great hesitance in many Millennials to invest their money in anything that holds the slightest risk factor.
To draw in these new investors, banks need to be relatable to the customer and offer convenient business tools to their customers. Building personal relationships is more important to Millennials than the brand trust itself.
As the Millennial and Generation Z adults start to enter the more investment-heavy parts of their lives when they are buying homes, starting retirement savings plans and building their portfolios, the banking industry will need to stay on point to keep up. Technological modern investment tools and developing real relationships are the way of the future in banking.