Name: Gen Z: Reshaping the future of banking
Uploaded: 2022-04-08T11:03:29.514Z
Duration: 753.48
Description: Gen Z is the diverse, socially conscious, side-hustle generation best known for being digital natives. How will they change the future of finance? One of the most influential names in fintech, David Brear, kicks off our "Gen Z" series by exploring how the behaviors and attitudes of this changemaker generation will require financial services to reinvent themselves.

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English

{{00:00:00}}
The bank of Rihanna, like
Rihanna has like 15 dudes

{{00:00:02}}
looking after her money, right?

{{00:00:04}}
She's not checking in on a
mobile app every 15 seconds to

{{00:00:06}}
understand what her balance is.

{{00:00:08}}
She's confident and comfortable that
people are managing her money for her.

{{00:00:11}}
I mean, you could pick on any
celebrity, not just Rihanna.

{{00:00:14}}
But being in a situation where that
is the case, well we can replicate all

{{00:00:17}}
of those things with algorithms now.

{{00:00:23}}
You're seeing a group of people
who have been born into digital.

{{00:00:26}}
This isn't something that they
have adopted, you know, I scraped

{{00:00:30}}
the millennial bucket just in
terms of that cutoff, but I

{{00:00:33}}
can still remember dial-up.

{{00:00:34}}
Like these are people who have
been born into a digital age where

{{00:00:38}}
really everything is immediate.

{{00:00:39}}
And I think actually when it comes
to pretty much every industry is

{{00:00:43}}
that the sort of end of an app right
now, you know, you can order a car

{{00:00:47}}
and it turns up so there's a driver.

{{00:00:49}}
You can order food and a great chef
provides it and turns up at your house

{{00:00:52}}
almost immediately in that sense.

{{00:00:55}}
So the knock on effect of that, I think
for every walk of life, is people kind

{{00:00:58}}
of just expect everything immediately.

{{00:01:00}}
And that's really difficult,
particularly when you're talking

{{00:01:02}}
about financial services.

{{00:01:03}}
Yeah, absolutely.

{{00:01:04}}
And so, you know, as you sort of talk
about these demands and just that they

{{00:01:09}}
are born into this, what do you think
that banks and fintechs should be

{{00:01:12}}
really learning about this behavior?

{{00:01:14}}
Yeah.

{{00:01:14}}
I mean, of all those organisations
that do amazingly well in digital,

{{00:01:18}}
none of them are forcing people to
do self service in that sense, you

{{00:01:21}}
know, Deliveroo doesn't send you
the ingredients and expect you to

{{00:01:24}}
cook the food yourself, you know?

{{00:01:26}}
So in the sense of financial
services, I don't think people

{{00:01:29}}
kind of want, I mean, nobody
let's be honest like nobody,

{{00:01:31}}
nobody here wants to do banking.

{{00:01:33}}
Right.

{{00:01:34}}
I don't, like and I work in banking,
you know, like, so actually the

{{00:01:37}}
idea that self-service is what
digital is in this age, I think

{{00:01:41}}
we need to really move beyond.

{{00:01:42}}
I think everybody really wants,
and I think this generation

{{00:01:46}}
particularly is actually people
to do financial services for them.

{{00:01:50}}
It's the private banker in their
pocket really maximising their revenue,

{{00:01:55}}
their opportunities, their investments
for them, rather than trying to

{{00:02:00}}
teach them how to do it themselves.

{{00:02:02}}
And I think that will just get
greater and greater the further

{{00:02:04}}
and further that we get into
those truly digital natives.

{{00:02:07}}
I mean, that's a really interesting
take that I think, you know, it's sort

{{00:02:11}}
of assumed that people want to learn
more and have more in their hands

{{00:02:15}}
so that they can do it themselves.

{{00:02:16}}
But it's interesting that you sort of
observe actually, it's not really that

{{00:02:19}}
they don't really want to do this,
but they want someone who can do it

{{00:02:23}}
for them and better ways to do it.

{{00:02:25}}
Yeah.

{{00:02:25}}
I think they want to buy into the
principles of the organisations that

{{00:02:28}}
serve them, but it has to be a service.

{{00:02:30}}
I mean, financial services is
literally called financial services.

{{00:02:33}}
You know, it's not
products, it's a service.

{{00:02:36}}
And actually I think what's happened,
you know, and it started way before

{{00:02:39}}
this generation was even a twinkle in
mum and dad's eye, you know, like in

{{00:02:43}}
terms of that sense that actually, you
know, digital fundamentally changes

{{00:02:49}}
the form factor of an industry.

{{00:02:51}}
And I think we sort of kid ourselves
sometimes sitting in the industry

{{00:02:55}}
that everybody's interested.

{{00:02:56}}
But if you go and talk to the normal
people on the street, I mean, banking

{{00:03:00}}
is just something that it's a grudge,
it's a thing that they get round to.

{{00:03:03}}
It's the Sunday night thing
that they've been putting off.

{{00:03:06}}
And particularly as I say for a
generation that has such a high

{{00:03:09}}
expectation of immediacy, then the
idea that there's a structure or a

{{00:03:16}}
power that will penalise you for doing
it in the wrong way, that markets

{{00:03:20}}
that they're on your side, like that
just doesn't process in terms of a

{{00:03:25}}
market that really now we have the
choice to move our money to other

{{00:03:29}}
providers who really are on our side.

{{00:03:31}}
So, you know, I think this is a
yes, this generation, you know,

{{00:03:34}}
Gen Z is accelerating that trend,
but I think this is something

{{00:03:37}}
that's been brewing since the 60s.

{{00:03:40}}
How do you think that fintechs
and banks really need to be

{{00:03:43}}
better engaging with with these
Gen Z audience to get it right?

{{00:03:46}}
Yeah, I think it's, there's two things.

{{00:03:48}}
I think it's algorithms can
replicate the experiences that

{{00:03:52}}
hundreds of people would be if
they're managing your money.

{{00:03:55}}
You know, the experience that
celebrity, you know, the bank of

{{00:03:58}}
Rihanna, like Rihanna has like
15 dudes looking after her money.

{{00:04:02}}
Right.

{{00:04:02}}
She's not checking in on a
mobile app every 15 seconds to

{{00:04:05}}
understand what her balance is.

{{00:04:06}}
She's confident and comfortable that
people are managing her money for her.

{{00:04:10}}
I mean, you could pick on any
celebrity, not just Rihanna.

{{00:04:12}}
But being in a situation where
that is the case, well we can

{{00:04:15}}
replicate all of those things
with algorithms now you know.

{{00:04:17}}
We're in an era where Teslas drive
themselves and cars are, you know,

{{00:04:21}}
far better at avoiding accidents
than we are, but still if somebody

{{00:04:24}}
goes into their overdraft, they're
being penalised for it rather

{{00:04:27}}
than moving savings money to it.

{{00:04:29}}
So in that world, what's really
holding us back, I think we need to see

{{00:04:34}}
business models being revolutionised.

{{00:04:36}}
We need to see organisations really
looking to connect with people.

{{00:04:40}}
You know, this isn't just about,
you know, TCF and standing up for

{{00:04:43}}
like good causes when people think.

{{00:04:45}}
It's like, we really have to make our
marketing and the action of what we do

{{00:04:49}}
on a day-to-day basis really, really
matched now, because I think more than

{{00:04:53}}
any generation, I think if people mess
up, and because there is competition in

{{00:04:58}}
the marketplace because fintechs have
scaled to a great level, people really

{{00:05:01}}
can vote with their money and move it
to somebody who they think actually

{{00:05:05}}
aligns to their interests and their
expectations really, really quickly.

{{00:05:09}}
So, you know, when we talk about a
generation that really at the moment

{{00:05:13}}
sort of needs to be incentivised to
be engaging, and to be sort of getting

{{00:05:20}}
involved in apps and services, what are
the incentives that you think fintech

{{00:05:24}}
solutions can offer now and maybe don't
offer that, that they should offer?

{{00:05:28}}
Yeah.

{{00:05:28}}
I think it's the engagement
in the experience.

{{00:05:31}}
You know, actually financial
services generally gets in touch

{{00:05:35}}
when there's something wrong, like
you've missed a payment, you've missed

{{00:05:37}}
a bill, you're in your overdraft.

{{00:05:39}}
They didn't really get in touch with
you that often when there's something

{{00:05:41}}
positive to say, and that's how I
think the gap, you know, actually,

{{00:05:45}}
how can you, I mean, the friends
you only hear from when there's a

{{00:05:48}}
problem, probably isn't your friends.

{{00:05:51}}
Right.

{{00:05:51}}
So, so how do you create
that relationship?

{{00:05:53}}
It's gotta be about building
trust and that trust has

{{00:05:56}}
to be about adding value.

{{00:05:57}}
So again, I think it goes full circle
on the service piece, you know, really

{{00:06:01}}
do you want to a great waiter, or a bad
landlord, you know, the bad landlord is

{{00:06:06}}
going to bang really heavy when there's
a problem, but that great waiter

{{00:06:08}}
is going to really work with you to
make your experience a little better.

{{00:06:12}}
And for me, that comes back to really
that point I was making earlier

{{00:06:15}}
on, which is, you know, this is
a service, this is an experience.

{{00:06:19}}
And actually I think the capability of
popping up and making people better off

{{00:06:24}}
or helping people save money, or being
in a situation where they're maximising

{{00:06:30}}
the returns on the investments
that they're actually seeing.

{{00:06:33}}
This is all stuff that, you
know, if a car can autopilot,

{{00:06:36}}
then why can't my bank?

{{00:06:37}}
So, you know, you mentioned some of
the things that banks could potentially

{{00:06:40}}
be doing, can you talk a little bit
about, you know, the considerations

{{00:06:43}}
that financial institutions and FinTech
need to be doing and thinking about

{{00:06:47}}
when designing new products for Gen Z?

{{00:06:49}}
This is difficult.

{{00:06:50}}
This is really difficult because often
these processes have been embedded,

{{00:06:53}}
particularly in the big organisations
for like 15, 20 years, you know,

{{00:06:56}}
this is the way we build products.

{{00:06:59}}
But software cycles have
really changed that.

{{00:07:01}}
The point I was making a little bit
earlier on around digitised versus

{{00:07:05}}
digital, we think the sort of virtues
of digital, we use a kind of a small

{{00:07:10}}
acronym, it's riches RICHES, it's real
time, it's intelligent, contextual,

{{00:07:13}}
human, extendible and social.

{{00:07:15}}
And actually, if you're building
a truly digital service, well, it

{{00:07:19}}
needs to be all of those things.

{{00:07:20}}
And actually we found many
organisations kind of use that as

{{00:07:23}}
a hey, like if it is real time,
how are we using data effectively?

{{00:07:28}}
If it is contextual, then given
everybody's carrying a mobile phone

{{00:07:31}}
with them all the time, then why is
the experience I get when I'm on the

{{00:07:34}}
train, the exact same experience when
I'm at home, the exact, you know, these

{{00:07:37}}
things should be personalised, right?

{{00:07:39}}
The promise of the internet was
using data to heavily personalise the

{{00:07:43}}
experience of these things to be a, not
a one size fits nobody, but be really

{{00:07:48}}
unique and bespoke to that individual.

{{00:07:50}}
And this is where I think we'll get to.

{{00:07:51}}
So RICHES for us gets
you everybody there.

{{00:07:54}}
But it's, again, it's as
much a cultural change within

{{00:07:58}}
those organisation as any.

{{00:07:59}}
For FinTech it's great.

{{00:08:01}}
I mean, these guys, they've
got nothing to lose, right?

{{00:08:03}}
If they can understand those brutal
realities of day-to-day lives of

{{00:08:07}}
people on the street, the problems
that they can really solve for

{{00:08:09}}
them, do that it's that easy.

{{00:08:12}}
So Gen Z, you know, surprisingly
actually prefers to go to a bank branch

{{00:08:17}}
rather than online banking still today.

{{00:08:20}}
So do you think this is
something that's going to phase

{{00:08:21}}
out or will people always be
preferring physical banks?

{{00:08:24}}
So I think that very much is into
that nobody wants to be a banker,

{{00:08:29}}
you know, so if I'm given a bunch of
incredibly complex subject matter fed

{{00:08:35}}
to me through a mobile app, am I going
to have the trust in the organisation

{{00:08:38}}
that they've got the best intent?

{{00:08:39}}
Am I going to feel confident making
incredibly, you know, sophisticated

{{00:08:44}}
and impactful, I mean, most
people don't know what an APR is.

{{00:08:47}}
Like most people don't really
want to work out percentages.

{{00:08:50}}
So you want to make me try and
work out compound interesting on

{{00:08:53}}
an investment that I'm going to
make, or like a purchase, like a

{{00:08:56}}
mortgage that's going to tie me
to it for 25 years or something?

{{00:09:00}}
So I think why that is, people
are just looking for a safety net.

{{00:09:04}}
You know, they're looking for the
guidance, you know, actually it's

{{00:09:08}}
the service, it's like, how do
people, how can people rely on you?

{{00:09:11}}
They want to see that.

{{00:09:13}}
And I think that's something that,
you know, increasingly we're seeing

{{00:09:15}}
across many generations is really,
again, now that we've got choice

{{00:09:20}}
now that we actually can make a
decision and move products really,

{{00:09:24}}
really easily, you know, in the
UK, we've got things like seven-day

{{00:09:26}}
switching for current accounts.

{{00:09:28}}
We've got, you know, processes that
the regulator is built around the

{{00:09:31}}
industry to facilitate that move a
lot easier than I think people are

{{00:09:35}}
really looking for, you know, the
whites of their eyes of the people

{{00:09:38}}
in the organisation to, A, make sure
that they're not messing up a big

{{00:09:42}}
decision that will affect them for
the rest of their lives, but, B, can

{{00:09:45}}
they really trust that organisation?

{{00:09:47}}
So I think it's a trend, not because,
you know, millennials and Gen Z and

{{00:09:53}}
everybody don't trust digital, but I
think it's a way that digital banking

{{00:09:58}}
is really not done in this sense.

{{00:10:00}}
So I think as we see the increase
in the sophistication of the

{{00:10:04}}
capability that's actually being
delivered to people, I think

{{00:10:07}}
physical branches and those things
will be a thing of the past.

{{00:10:09}}
So it's essentially trusting
the digital and has to be strong

{{00:10:14}}
enough to be able to do that?

{{00:10:15}}
If you get a great service,
you won't need people.

{{00:10:18}}
Amazing.

{{00:10:19}}
So the trend that Gen Zs follow
really do sort of change rapidly.

{{00:10:25}}
And it's difficult to put Gen Z
in a specific segment at times

{{00:10:29}}
because they're extremely fluid.

{{00:10:31}}
How do you think that financial
institutions can track these

{{00:10:33}}
changes and adapt quickly enough?

{{00:10:36}}
And, you know, essentially the question
is, are they equipped to be agile?

{{00:10:39}}
Second one first, no they are not.

{{00:10:43}}
They are definitely not
really able to do that.

{{00:10:46}}
And I think it's difficult because
I think as a generation, they're

{{00:10:49}}
looking for people who, you know,
do what they say they'll do.

{{00:10:52}}
You know, do they represent the
values that I have as an individual?

{{00:10:56}}
Do they really stand up for
the things that I believe that

{{00:10:58}}
they should be standing up for?

{{00:11:00}}
Not just tokenistically, not just
some, you know, long form post

{{00:11:03}}
on Twitter, but fundamentally
are they operating in a way that

{{00:11:07}}
aligns to my values and my ethics?

{{00:11:09}}
And I think, are people
prepared for that?

{{00:11:11}}
Absolutely not because it can
really shine a light so heavily

{{00:11:16}}
on even what people would think
would be the most minor things.

{{00:11:19}}
And actually, if you look at that
as a trend, the sort of clarity that

{{00:11:24}}
is being brought through being broke
through on social media, I think

{{00:11:29}}
people who are in businesses are under
more scrutiny now than ever before in

{{00:11:33}}
terms of actually how they operate.

{{00:11:34}}
So, yeah, I think they're going to
be a lot of organisations that I

{{00:11:38}}
think will get caught out from that.

{{00:11:39}}
And it's not just, don't get me wrong,
I mean, there were big, heavy hitting

{{00:11:43}}
topics that from a DNI perspective,
from various different walks of

{{00:11:47}}
life, in terms of what's happening
in the Ukraine in different places,

{{00:11:50}}
but actually even just comes back to
the minor points around the values

{{00:11:54}}
of the business, them aligning with
the senior leadership of the teams.

{{00:11:57}}
And actually, again, just doing
what they say they'll actually do.

{{00:12:00}}
I think we've suffered for a long
time, which is marketing above the line

{{00:12:06}}
campaigns, TV adverts, sort of portray
a certain narrative around businesses.

{{00:12:11}}
But more than ever that transparency
between, you know, what you say you're

{{00:12:14}}
going to do and the real experience
that you get, people are looking for

{{00:12:17}}
that, not to be a Venn diagram, they're
looking for it to just be a circle.

{{00:12:21}}
Well, David, thank you
so much for joining us in

{{00:12:23}}
the Streamly studio today.

{{00:12:24}}
It's been an absolute
pleasure speaking with you.

{{00:12:26}}
No problem.

The bank of Rihanna, like
Rihanna has like 15 dudes

She's not checking in on a
mobile app every 15 seconds to

She's confident and comfortable that
people are managing her money for her.

I mean, you could pick on any
celebrity, not just Rihanna.

But being in a situation where that
is the case, well we can replicate all

You're seeing a group of people
who have been born into digital.

This isn't something that they
have adopted, you know, I scraped

the millennial bucket just in
terms of that cutoff, but I

Like these are people who have
been born into a digital age where

And I think actually when it comes
to pretty much every industry is

that the sort of end of an app right
now, you know, you can order a car

You can order food and a great chef
provides it and turns up at your house

So the knock on effect of that, I think
for every walk of life, is people kind

And that's really difficult,
particularly when you're talking

And so, you know, as you sort of talk
about these demands and just that they

are born into this, what do you think
that banks and fintechs should be

I mean, of all those organisations
that do amazingly well in digital,

none of them are forcing people to
do self service in that sense, you

know, Deliveroo doesn't send you
the ingredients and expect you to

So in the sense of financial
services, I don't think people

kind of want, I mean, nobody
let's be honest like nobody,

I don't, like and I work in banking,
you know, like, so actually the

idea that self-service is what
digital is in this age, I think

I think everybody really wants,
and I think this generation

particularly is actually people
to do financial services for them.

It's the private banker in their
pocket really maximising their revenue,

their opportunities, their investments
for them, rather than trying to

And I think that will just get
greater and greater the further

and further that we get into
those truly digital natives.

I mean, that's a really interesting
take that I think, you know, it's sort

of assumed that people want to learn
more and have more in their hands

But it's interesting that you sort of
observe actually, it's not really that

they don't really want to do this,
but they want someone who can do it

I think they want to buy into the
principles of the organisations that

I mean, financial services is
literally called financial services.

You know, it's not
products, it's a service.

And actually I think what's happened,
you know, and it started way before

this generation was even a twinkle in
mum and dad's eye, you know, like in

terms of that sense that actually, you
know, digital fundamentally changes

And I think we sort of kid ourselves
sometimes sitting in the industry

But if you go and talk to the normal
people on the street, I mean, banking

is just something that it's a grudge,
it's a thing that they get round to.

It's the Sunday night thing
that they've been putting off.

And particularly as I say for a
generation that has such a high

expectation of immediacy, then the
idea that there's a structure or a

power that will penalise you for doing
it in the wrong way, that markets

that they're on your side, like that
just doesn't process in terms of a

market that really now we have the
choice to move our money to other

So, you know, I think this is a
yes, this generation, you know,

Gen Z is accelerating that trend,
but I think this is something

How do you think that fintechs
and banks really need to be

better engaging with with these
Gen Z audience to get it right?

I think it's algorithms can
replicate the experiences that

hundreds of people would be if
they're managing your money.

You know, the experience that
celebrity, you know, the bank of

Rihanna, like Rihanna has like
15 dudes looking after her money.

But being in a situation where
that is the case, well we can

replicate all of those things
with algorithms now you know.

We're in an era where Teslas drive
themselves and cars are, you know,

far better at avoiding accidents
than we are, but still if somebody

goes into their overdraft, they're
being penalised for it rather

So in that world, what's really
holding us back, I think we need to see

We need to see organisations really
looking to connect with people.

You know, this isn't just about,
you know, TCF and standing up for

It's like, we really have to make our
marketing and the action of what we do

on a day-to-day basis really, really
matched now, because I think more than

Gen Z

Trend

Gen Z is the diverse, socially conscious, side-hustle generation best known for being digital natives. How will they change the future of finance?
One of the most influential names in fintech, David Brear, kicks off our "Gen Z" series by exploring how the behaviors and attitudes of this changemaker generation will require financial services to reinvent themselves. 

Digital Transformation

Digital banking

Open banking

Segmentation

Hyper Personalisation 

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David Brear

CEO & Co-Founder 

The idea of self-service is not what Gen Z wants to spend their time doing. For people who are not experts, banking is a burden on their daily life. Financial services should focus more on services instead of products. 

Banks could learn from Gen Z

Your marketing efforts must match your day-to-day activities in order to attract Gen Z. This generation can easily switch to another solution more aligned with their interests.


Improving engagement 

Fintechs should invest in engagement and experience to capture Gen Z's interest. 

Fintech initiatives

Brear talks us through what digital RICHES requirements are and how building a digital service should encompass each element. 

Catering financial products 

It's all about trust. Most of the customers still prefer to go to bank branches. Traditional banks earned trust over time, while digital banking has yet to achieve it.


Online versus traditional banking

Organisations that work according to their ethics and values really matter to Gen Z. Brear discusses why people and businesses are under more scrutiny than ever before. 