Generation Z, the next wave of banking customers, fearful of cyber fraud

Generation Z, the next wave of banking customers, fearful of cyber fraud

Financial institutions and anyone providing online financial services – take note – your next wave of potential customers, labeled “Generation Z” for anyone born in 1995 and beyond, is very sensitive to the risks of cyber fraud, especially to electronic apps on their smart phones or tablets or even PCs. By 2020, this grouping of the population mix is projected to be 40% of the consumer buying force, and their proclivities vary from the Millennials that have preceded them.

These post-1994 babies have only known the electronic age of hand-held devices, social media, and instant communicating, but they differ from Millennials (1980 – 1994) in one peculiar way. They are much more concerned about the risk of fraud, whereas their older brothers and sisters have generally been considered as being “security lax”. These folks also comprise the early target market for banks and have already formed firm opinions about what banks should be doing to protect them, their private information, and their account data.

Planet Biometrics, a website that keeps track of all things related to biometrics, recently conducted a study to discern how Generation Z’ers could change the world as we know it. Per their study:

Our recent research into Generation Z’s attitudes towards banking and online security and biometrics found that nearly eight-in-ten (79%) 16-24-year olds think banks should do more to protect their customers from fraud. Additionally, the youngest consumers in our study were 16-17-year olds, the target age for many new banking customers. Of this age group, a huge 95% think banks should be increasing fraud protection for their customers.

These “Z-sters” grew up in an era when cyber crime began and then continued to wreak havoc in every aspect of online endeavor or area of retail commerce. Other studies have also revealed that criminals have gradually shifted to fleecing younger members of the population, since trust has been so easily given in online situations. The misconception these days is that fraudsters only defraud the older and elderly members of the community, but perhaps, this subtle shift did not go unnoticed by those born after 1994.

This new survey confirmed this line of reasoning, when evaluating the attitudes of the youngsters among us:

Our research found that nearly three-quarters (74%) of 16-24-year olds believe it is too easy to find someone’s personal information online nowadays. Also, more than half (52%) of Generation Z are worried about someone stealing their identity.

The “Gen Z” folks are much more cautious about installing the latest app on their devices, whereas the general perception has been just the opposite. Researchers point to one example from a focus group, Nikki, a 24-yearold from London, as representative of the thinking of this segment of society:

I only use my bank card to pay for things. I deliberately keep my phone separate because I don’t want spending money to be too convenient.

In another focus group, Michael, a 19-year old student from London, expressed his reticence when dealing with an online bank:

I feel the online banks have to push up their security because there’s no physical presence. So they’ve got to be more secure to be on top of their game.

The concerns are evidenced in other parts of the survey results, which suggest that Generation Z youngsters do not trust their banks to refund them in case of credit or debit card fraud or if someone gained access to their bank accounts and stole their funds directly.

How are banks to address these concerns? One survey snippet is quite revealing:

The findings also show that Generation Z wants to see banks adopting new technology to combat card and online fraud. Nearly two-thirds of them (62%) think all banks should offer biometric payment cards to help reduce fraud.

And surprisingly enough, these young customers are willing to pay for these added security features and enhanced protection methods like biometrics, as well.

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