Tap into Generosity to Engage NextGen Customers
In the drive to attract Millennial, Gen Z, and other NextGen customers, financial institutions would do well to recognize that those generations are serious about making the world a better place, and that they want to do business with firms that share that passion. But doing that takes more than sponsoring a community organization or aligning with a high-profile charity. Institutions need to facilitate these customers’ giving by folding charitable action into banking. Riding Waves of Generosity If there’s one thing you can count on, it’s that Americans will give more to charity just about every year. What you can’t count on year after year is whom those donated dollars will come from, what prompts charitable giving, and how donors will give. Consider these facts: • Charitable giving topped $470 billion for the first time ever in 2020. • Nonprofit Source has noted that roughly 84% of Millennials give to charity, compared to 74% of the nation as a whole. • In mid-2021, The NewYork Times reported that COVID-related giving surpassed giving following the 2008 recession and the attacks of Sept. 11, 2001. • CNBC reported that nearly three-quarters of Millennials donated to COVID relief, and more than two-thirds of Gen Z made gifts. • Cone Communications notes that 83% of Millennials say they are more loyal to firms that help them contribute to causes. The point of this data barrage is three-fold: Charitable giving is a big part of American life, the generations making their way to the front of the line might be even more generous than previous generations, and technology plays a bigger role in giving. What does all of this mean to financial institutions? That they can’t claim to be fully engaged in their customers’ financial lives if they aren’t involved in their charitable giving, and they can’t create that engagement unless they facilitate giving with technology.
Overall, there has simply not a been secure process for donors in the past. Gifts are often sent via check through the mail or by entering credit card information into a less then secure online donation page. Financial institutions are pillars of their communities, and trusted institutions, which positions them to solve these problems for the customers by offering a safe and easy solution for charitable giving within their services. The Up-and-Comers It’s no secret that the rising generations have the power to change the way financial institutions operate. The two largest generations in U.S. history, Millennials and Gen Zers not only are approaching their prime earning years, but they also stand poised to receive some $30 trillion in generational wealth transfer. The key to engaging them, of course, is to connect them with what they value, and they have made it pretty clear that they value technology and making the world a better place. As highly diverse digital natives, the up-and- comers embrace their passions and are more likely than previous generations to fund causes they care about. They give more often than past generations and do so quickly when given the opportunity. Social beings, they want others to join them when they do support a cause, and they are more likely to patronize businesses that align with their passions. Finally, they want to give in the same way they want to do everything else: easily and through technology. Active on mobile devices, they prefer to give through websites and social media. In essence, they expect to give the same way they buy things on Amazon or get a ride from Uber. Changing Banks’ Roles in Giving So far, while many banks support the charitable giving of their more affluent customer base, they haven’t done much to tap into this phenomenon for their retail banking customers. Considering the countless transactions and billions of dollars involved in charitable giving, financial institutions play a relatively small role in the process, which
By Joe Fisher President and CEO at Ren and Gideon Taub EVP of Emerging Markets at Ren , and founder of Pinkaloo
THE FINANCIAL BRAND INSIGHTS SPRING 2022
THE FINANCIAL BRAND INSIGHTS SPRING 2022
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