Once again, an excellent article from The Financial Brand caught my eye recently. In the article, the author examined 5 demographic trends bankers should be focused on in 2025. I agree that it would be wise for bankers to pay careful attention to all 5 of these trends and make a specific effort to strategically plan for ongoing success in these areas. The 5 demographic trends are: The Great Wealth Transfer Younger Customers Demand More From Brands In-Person Banking Makes a Comeback Young People Cannot Afford Homes Young Generations are Interested in Making Investments Let’s examine these in more detail and why I believe its strategic for your institution to make it a strategic focus. The Great Wealth Transfer –In the article, the author references that as much as $80 trillion will transfer from silver seniors and baby boomers. To whom? Maybe Gen X children, but due to financial planning it could pass down to Millennial and Gen Z grandchildren. If this is true, then what should a financial institution due to capitalize on it? I would suggest that if you have not already captured young millennials or Gen Z customers prior to them receiving an inheritance, it is unlikely they bank with you just because grandpa and grandma did. Strategic Focus – Be more proactive in attracting and keeping younger customers and start bringing on highly trained investment advisors who look and talk like these younger customers. Younger Customers Demand More From Brands – Consider this quote from the article, “Younger generations expect their banks to be user friendly, intuitive, and curate things in a way that personalizes the experience for them.” Let’s just focus on this one statement, be completely honest and ask yourself, is your institution user friendly for younger customers? Do you provide intuitive service across all channels? Can your younger customers curate your digital banking services in a way that is uniquely personal for them? If you cannot answer in the affirmative to all three of these questions, you have some work to do in the coming years. Strategic Focus – Take a long hard look at your online and mobile banking apps, your payment options, and your ability to completely customize that experience. If you find you have been making purchase decisions based on preferential pricing that is not best for the customer experience, you need to change course. In-Person Banking Makes a Comeback – It’s no secret that large FIs are investing in bank branches. These smaller footprint locations are specific to creating an engaging place where younger people can have a meaningful interaction with bank experts. Not to perform transactions but to get financial advice, education on services, and maybe a barista inspired cappuccino. I have long advocated for banks to examine true branch transformation away from account opening and teller stations into an engagement center where innovation thrives, focused on consultative selling, education and problem solving. A transformed branch where appointments can be made and perhaps even an experiential Virtual Reality setup. Furthermore, if actually being in branch is not possible, why not have an “in-person” interaction right on the mobile phone or tablet. Strategic Focus – Your branch is no longer needed for transactions, all of which can be done online. Instead, determine the maximum amount of branch transformation you can stomach and brainstorm a methodical reimagining of what happens in a branch to attract younger customers to want to visit it. Young People Cannot Afford Homes – Banks largest income category is loan interest. Perhaps your largest interest income comes from mortgage interest. If the prices of entry level homes are out of reach for most young Millennials and Gen Zs, they will choose to rent or live with their parents. What will be the reduced amount of interest income for your institution if that holds true? The article suggests that banks could offer down payment assistance or adjust underwriting to account for rent history to be a factor in approving mortgage loans. Those are certainly good ideas but working with city and county leaders to make sure there are affordable first home options within your service areas is even more important. Plus, start talking about delayed gratification early on in communication to younger customers. For example, the concept of starting early to build up savings for important larger future purchases like buying a home. Strategic Focus – Create a strategic plan to make home ownership a reality targeted to younger borrowers. This not only generates a long-term revenue stream, but home ownership also helps to keep customers rooted in your service area, further keeping them as customers. Young Generations are Interested in Making Investments – Even if younger customers do not receive an inheritance, there is a strong interest in investing. However, there is a perception that you have to have a significant amount of money to invest in order to get curated investment advice. This drives younger people to services like RobinHood, Acorns or Stash for investments. What you need is for younger customers to start investing early, even as teenagers, in small amounts. The key is to establish a pattern of investing for each amount of income that is earned, even if the amount is very small. Teach then about the power of compounding interest and when they are old enough, shift into other relatively safe investments like mutual funds. Create an environment that has an excess of financial education, provided in a highly entertaining and fun format (think TikTok) while continuing to infuse them with your brand. Strategic Focus – Younger customers do not have the deposit heft of their parents or grandparents but most eventually will, so you have to get as many new younger customers as you can and carefully work with them to see you as a strategic partner, not just a bank. Most of you will not have your annual strategic planning offsites until later this fall, but if any of the above issues strike you as important enough to not wait, get a cross-functional group together and begin brainstorming how you can change your strategic focus over the next 5 years. With a 5-year plan in place, what would you need to accomplish the rest of this year to move your plan forward? Then execute on those elements. This fall, what would you need to do in 2026 to further advance your plan forward? When necessary, adjust your plan as circumstances require. Dedicate appropriate resources to making this strategic focus happen, it is possible that there is no other issue as critical for your institution’s long-term success. References https://thefinancialbrand.com/news/demographics/5-key-demographic-trends-for-bank-marketers-to-watch-in-2025-185485 The views expressed in this blog are for informational purposes. All information shared should be independently evaluated as to its applicability or efficacy. FNBB does not endorse, recommend or promote any specific service or company that may be named or implied in any blog post.