As highlighted in our research report, The financial tribes you need to know, a growing number of people aged between 18 and 34 are looking to make a ‘respectable’ use of their savings, in all senses of the word. Today’s buzz about social enterprise is increasingly being favoured by the young and educated who value meaningful social action from the brands they put their trust and money in. A departure from the previously received wisdom that to be successful as a bank you have to be single-minded and a little bit soulless.
In fact, more and more financial institutions are considering their customers’ ethical quandaries like never before. Referred to as ‘ethical bankers’, those customers have grown up in a digital world and their decision-making process is deeply influenced by values linked to climate change awareness and social responsibility - so much so that they are happy to pay a premium for financial services that help the environment or local communities.
Ethical bankers are one of the fastest growing financial tribes in the world, with some of the loudest voices: 78% of them say that they're more likely to use a bank that puts purpose over profits. So can finance attract this key segment, help them reduce their carbon footprint and, in turn, make a positive difference for everyone in the world?
Distinctive traits that describe ethical bankers and their online behaviour:
- Almost half of the respondents of this group (42%), admit to spontaneous or very spontaneous spending habits, despite almost half of them having become more likely to buy their own home.
- The pandemic has also left a mark on how ethical bankers behave and ⅔ of them find it important to be able to open new bank accounts just using digital services.
- With the increase of online shopping, ethical bankers have also increased the likelihood of switching their bank account, at a whopping 43% of the total
So how can banks engage ethical bankers?
First and foremost banks need to acknowledge this demographic and the growing influence that Gen Z will have on society. This is the generation that will hold the world’s spending power in the decades to come so any future-proof business needs to cater to their needs.
With some of the most spontaneous and unplanned spending habits, it is essential that banks provide digital services that match such volatility. And old-fashioned transactional relationships will push ethical bankers to look elsewhere for better customer experience.
However the one most important channel to engage this group is to live their values and don’t assume that consumers won’t pay a premium price in order to make more ethical banking services a reality. Many will be open to pay more, but only if your sustainability values are embedded and authentic to your business.