Generation Z accounts for 40 percent of all consumers, while only 47 percent of this generation uses a major bank. In order to stand out, banks must focus on new approaches to drive value for this growing segment. FinTech companies have been successful with Generation Z because they offer easy and efficient solutions. Banks need to make investments in mobile banking and more self-service options to emulate the technology-driven ease offered by FinTech.
According to global management consulting firm McKinsey, by 2025 between 10 and 40 percent of bank profits may be under threat due to the expansion of FinTech companies. Often banks, in order to proactively move ahead, find ways of cooperating with the most promising FinTech companies. Even in traditional banks, the system of interaction with customers is changing, since most of the work is shifting to digital channels. The traditional bank with branch offices, queues and paperwork is becoming outdated.
Some of the largest banks are closing branches that previously served both corporate and retail clients. This makes sense, as most people now use online banking, mobile applications, and call customer service phone lines less and less, preferring to communicate online.