Posted by Nikhita Gurukula on 20 Jul 2022
*Originally published on CUInsight.com
Generation Z, or Zoomers, is the only generation that has not experienced life without the convenience of internet connectivity. This fact, along with the ongoing COVID-19 pandemic, has disrupted the world of traditional financial institutions. As a result, Zoomers commonly explore neobanks.
What are neobanks?
According to Forbes, ‘neobanks’ are fintech firms that offer various software and apps to create digital banks. Much of what Zoomers value goes hand-in-hand with what neobanks have to offer.
Many traditional financial institutions are faced with the challenge of the speed and accessibility that neobanking offers. There was no real need for fast-paced evolution before the boom in online services, as they functioned for years within a structured oligopoly. As mobile-first financial institutions, neobanks have succeeded in creating high-speed, user-friendly interfaces.
There are also some issues with financial institutions that lack alignment with Gen Z values.
Despite the evident modern edge that neobanking has, Zoomer consumers can admit that there are still services that only traditional financial institutions can offer. Neobanking, as of right now, is more focused on essential, simple services, like checking and savings accounts. Traditional institutions provide mortgages and other types of loans.
Traditional banking institutions still have a lot to offer, including in-person services. The majority of Zoomers are still in school, and many of them have yet to worry about buying a home and paying mortgages, which is why the appeal of neobanking remains strong. Also of consideration—many Zoomers grew up watching their parents bank with traditional financial institutions, making it possible that they will trust what they’re familiar with.
Read more about Zoomers in Zoomers on Campus: Where I Choose to Bank.
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