Generation Z is the next wave of major consumers for lender providers; thus, the software they use better be ready. A tech-savvy, digitally native generation that has never known anything other than a screen. While older consumers tend to favour traditional channels such as phones and email, younger buyers expect a fully digital experience from start to finish.
To help lenders succeed in today's competitive marketplace, loan management platforms need integrated solutions supporting new digital needs and technology preferences. The payment processing landscape is changing at a pace never seen before, and lending platforms need to keep pace.
Generation Z is the next big wave of consumers for financial service providers.
Move over Millennials; here comes Gen Z (anyone born after 1996). With an income set to increase fivefold, hitting $33 trillion by 2030, every business will need to stay ahead. Understanding this generation's values and spending habits will be vital. Especially because they will account for over a quarter of the worldwide income as reported by global payments.
They have lived in an ever increasingly digital world and never known anything else. They have likely never waited for a bill to arrive in the mail, paid with a cheque, or found themselves in a brick-and-mortar bank. For years, businesses knew this generation was coming, and now they are here.
Top 5 things loan management software will have to deliver
If lenders need to adjust to changes in customer behaviour, so should the LMS companies they use. Otherwise, lenders might find themselves trapped, unable to adapt to new payment trends and on the hunt for a better lending platform.
Let's look at five things the lending industry will have to do to satisfy Gen Z's consumer habits:
1. Embedded Buy Now Pay Later (BNPL) as a payment solution.
BNPL allows consumers to purchase goods and make payments in installments. And for many young people that have a limited cash flow–it works. With a $100 billion in sales in 2021, no payment trend has affected the world of payments more than buy now pay later. Considering that almost 75% of BNPL users in the US are Gen Z and millennials, lending platforms should pay heed. No business can afford to miss out on that kind of market growth. Lenders looking for a solution to meet the needs of Gen Z preferences will gravitate towards one that offers the ability to capitalize on this growth.
2. A seamless customer payment journey.
The whole journey from start to finish needs to be fast, easy, and 100% digital. With the rise in global B2B non-cash transactions expected to hit 200 billion transactions by 2025, now is the time to consider the payment journey your software solution delivers. Let's face it, applying online and then transferring to a different platform to pay is a significant hassle. A white-labelled system behind the scenes enhances the customer experience and provides continuity with an organization's brand look and feel. When payment processing is integrated as part of applying or servicing their loan, it simply becomes part of the package. Loan disbursements need to be quick and efficient. Solutions that incorporate accepting payments with ease have become the norm.
3. Meet them with their payment methods.
Levelling up the payment stack to stand out in a highly competitive market. Loan management platforms can't be catching up to new technologies. Businesses that aren't accepting contactless payments or exploring options like BNPL risk falling behind younger consumers' preferences. Credit card usage is down, and alternative payment methods are up.
4. Enhance the customer experience
Prioritize customer service like market growth depends on it because it does. Customer service has emerged as a critical differentiator between companies, a top consideration for customers, and a profit-generating force in its own right. In fact,61%of customers globally say they have higher customer service standards than ever before.
5. Environmentally aware
93% of Gen Zers surveyed say that brands have an obligation to take a stand on environmental issues. Across the board, this generation is environmentally aware and tends to prefer socially and environmentally conscious companies. Swapping out any paper processes will be considered a win. Not to mention, paper documents are old, slow and unreliable. Reducing paper use in business processes is not only a sound and essential environmental practice, but it also contributes to better, more efficient business operations.
For example:
It saves money. Paper, stationery and ink are all expensive. Postage is also pricey. By going paperless, you're not only helping the environment, but you're also saving money.
It saves time. Printing documents, scanning papers, and physically organizing files are time-consuming activities. It makes business sense to go digital and give team members that time saved to use on more meaningful tasks.
It increases team productivity. Once everything is digital, employees have more time and businesses have more money to tackle the bigger strategies and tasks.
Does your loan management software support the features new generations want?
Now is the time for loan management software providers to begin planning how they'll serve future generations—because if your payment preferences aren't streamlined for Gen Z, you won't be a part of their lives.
Recognized for helping Canadian lenders transform their payment technology, VoPay's embedded technology layer provides Loan Management Software companies with the tools and payment capabilities needed to stay competitive and relevant in today's digital world.
