Modernizing Integrations for Digital Banks | Core10

As the world continues to move toward a digital-first approach, banking operations need to evolve to meet customer demands for fast, convenient, and secure services. This is even more critical as the population of baby boomers continues to age and millennials and Generation Z consumers make up a large portion of the potential client base. 

Young consumers have different needs and wants when it comes to banking and trusting their money to financial institutions. 

Get to Know Millennial and Generation Z Consumers

To fully understand their needs and wants, financial institutions need to better understand millennial and Generation Z consumers as individuals. 

Meet the Millennials

According to Pew Research Center, millennials include anyone born between 1981 and 1996, which puts them between the ages of 26 and 41 as of 2023.  

Here’s what you need to know about Millennials:

• Witnessed the evolution of the internet—from dial-up to Wi-Fi. Millennials can remember a time prior to the internet and now live in a post-internet world.
• Contributed to the rise of social media. Millennials played a significant role in Facebook, Twitter, etc., becoming popular tools for communication.
• First global generation thanks to the internet.
• Accumulated significant post-high school education debt.
• When compared to Generation Z, millennials are more focused. 
• When it comes to shopping, they are more likely to shop in-store, belong to loyalty programs, and spend more money than Generation Z consumers.

Meet Generation Z

Pew Research Center has defined Generation Z as anyone born in 1997 or later (an end point has not been defined). The oldest individuals from Generation Z are age 25 as of 2023 and are considered working young adults. Many, however, are still in middle or high school and live with their parents. 

Here’s what you need to know about Generation Z:

• Have always had access to high-speed internet, smartphones, and social media. 
• A fully immersed global generation. With the advancements in internet and digital technology, Generation Z has never not experienced connectivity on a global level. They commonly share values and characteristics across national borders. 
• Open to other educational opportunities outside of a traditional four-year college to avoid significant debt.
• More distracted than previous generations. Generation Z has always lived in a world that is constantly updated via digital communication. While they can quickly process information, staying focused on a single item is more challenging thanks to the social environment they were born into. 
• Intrigued by more independent or entrepreneurial work environments.
• More in-tune with social justice issues. 
• When it comes to shopping, they prefer online to traditional retail, are less likely to belong to loyalty programs, and spend less than millennial consumers.

Both generations rely on technology as an important part of how they live and who they are, but it has impacted Generation Z in a more powerful way. Generation Z has always lived in a world that is constantly updated. They have all the answers on their smartphones. Because of this, they are more distracted than millennial consumers in their work and social lives. 

However, they’ve watched the mishaps millennials have experienced using technology, from oversharing online to security issues. They are more cautious with technology thanks to the trial and error of millennial consumers. 

While both of these young generations have come from very different places, they are well-aware of the economic climate around them. Their future consumer decisions will be  impacted by the challenging world around them. 

Digital Banking and Young Consumers

Millennials and Generation Z are entering a more challenging world than earlier generations—economic uncertainty, pandemic, global instability, etc. But they are a force to be reckoned with. 

By 2030, millennials are projected to become the wealthiest generation. Generation Z won’t be far behind as their income is expected to hit $33 billion. And Generation Z is set to become the largest generation among all consumers, representing more than a quarter of the world’s population. 

Q: Why do financial institutions need to focus on these two influential generations? 

A: They are paving the way to the future of banking. 

According to a digital banking study performed by Chase, 99% of Generation Z and 98% of millennials use mobile banking apps to complete a wide range of tasks, from checking account balances to depositing a check. Digital services became critical to many businesses’ success during the pandemic, and the banking industry is no different. 

As the size and financial impact of the younger generations influence business technology, financial institutions need to prepare their organizations to meet the demands of these tech-savvy consumers. 

Roadblocks That Prevent Modernization Integrations for Digital Banks

What’s the hold up? Unless you’re a large global financial institution, most mid-size or small community banks do not have the internal bandwidth to develop, execute, and support a significant organizational change. 

Traditionally, bank employees are experts on customer-facing interactions and administrative support to get the customer what they need. While customer relationships are critical to a bank’s success, this expertise doesn’t translate to developing internal technology and integrations to solve consumer demands for digital products. 

The banking industry is reliant on finding a partner to help them provide the tools they need to create an exceptional digital banking experience for their clients. If banks fail to provide the service consumers expect, customers will move on to the next bank, or a neobank, that understands the importance of well-integrated technology. 

Modernized Integration Solutions for Banks

Each bank has different goals they want to accomplish with their digital modernization. For many financial institutions, they want seamless integrations to payments, opening accounts, digital lending, and analytics. 

Regardless of your bank’s goals, here are some items to keep in mind when considering integrations that modernize your digital banking operations. 

Digital banking operations need to offer a seamless and sound digital experience by:

• Providing customers 24/7 access and real-time data. Customers don’t want to follow traditional business hours. They’re busy and need to check in on their accounts when it works for them. It is critical to give customers access to their accounts and up-to-the-moment balance and transaction information via a variety of channels—mobile, app, in-branch—to meet the demands of your customer base. 

• Making data available for vendors. To create a desirable digital experience for your clients, you need to make sure you can easily access data from third-party vendors through the means of APIs. Not connecting fully to your vendors will impact your ability to understand consumer behavior, leverage sales opportunities, and provide additional services that your customers show interest in.

• Enhancing security and compliance. Financial institutions have always been required to provide  heightened security due to the nature of the data they collect. As more and more banks focus on digital enhancements, this becomes even more critical. Customers need to trust that their funds and personal information are safe with their bank.

Core10 Provides Exceptional Service Through Top Digital Banking Integrations

Core10 offers the Mesh integration layer to help banks manage their partnerships in one central location. An integration layer, like Mesh, is a game-changer for any bank wanting to implement numerous digital solutions for their customers. 

Mesh powers core and fintech connections on a cloud-based single- or multi-tenant, event-driven microservices platform equipped with robust security and monitoring.

With Mesh integration as a data solution tool, we provide:

• Rapid innovation. Plug-and-play vendors deliver the best-of-breed solutions your customers want.
• Fintech-forward technology. Our APIs are open and documented so clients can find new partners and add revenue streams.
• A 360-degree customer view. We bring data together from multiple systems to provide a holistic view of the customer.
• A solution that scales. Our team can meet banks and fintechs where they are on their technical journey and scale to cutting-edge solutions. 
• A way to own the stack. Banks can take ownership of their integrations to add value, ensure business continuity, and mitigate risk. 

Encore Bank experienced great success with modernized  integrations and API management tools. Through the implementation of Mesh, Encore Bank was able to reduce their internal manual processes and drive commercial banking capabilities. 

Core10’s Mesh solution offers a sustainable way to integrate your partners, helping you modernize your business. To learn more about Mesh integration, schedule a time to meet with our integration experts today.