According to the latest Consumer Atlas results, financial institutions separate from the Big 4 are missing out on future opportunities among Australia’s Generation Z. This now critical generation are aged 14-22 years old, typically employed and already holding well-formed opinions and preferences about the world of banking and finance.
The Big 4’s current stranglehold on Gen Z is evident with 74% nominating one of the Big 4 banks as their main financial institution, significantly higher than the overall average of Australians at 64%. With a wide range of financial institutions for these young consumers to choose from, why is it that Gen Z are gravitating to the Big 4 banks? One possible answer is the stronger digital capabilities of the major banks. The vast majority (72%) of Gen Z indicated they had used mobile banking apps in the last 4 weeks (compared to the overall average of 59%).
Whatever the reason for this initial attraction, a serious warning sign for the Big 4 is that Gen Z are much stronger advocates of Non-big 4 financial institutions with their Net Promoter Score (NPS*) almost 12 points higher than Gen Z customers of the Big 4 banks. With NPS acting as an indicator of future growth, the Big 4 need to remain cautious, particularly while digital banking amongst their competitors continues to improve.
What underlies higher NPS of the Non-big 4 banks among Gen Z is better staff service channels, suggesting that despite Gen Z being digital natives, personal contact and support remain vital.
*Net Promoter Score (NPS) is a service mark of Bain and Company, Inc., Satmetrix Systems, Inc., and Mr Frederick Reichheld. Advocacy is measured on a scale of 0 to 10, with 0 being ‘very unlikely’ to recommend and 10 being ‘very likely’ to recommend. NPS is calculated by subtracting the percentage of ‘Detractors’ (score 0-6) from the percentage of Promoters’ (score 9-10).
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Simon Pomfret – Senior Director
DBM Consultants is an Australian market research company established in 1992. It is a leading provider of research based advice and engaged by many of Australia’s largest blue chip corporations, some government departments and several global organisations.
About Consumer Atlas
Consumer Atlas is Australia’s largest on-going research program on how the nation does its banking and what customers think about the providers of financial services and the products they offer. It is based on a nationwide representative sample of about 60,000 Australians.