Over the past three months, through the Virginia Bankers Association, I have been given the opportunity to observe and partake in the banking industry. This complex industry engines the flourishing economy we all live in today. Within my time at Essex bank, the shared tasks and responsibilities have provided me with knowledge and experience towards the roles within a bank and how the overall bank functions. As I interacted with different departments, from retail to commercial lending, I have begun to understand how to provide financial inspiration through intriguingly unique experiences that educate and empower action. Moreover, I have also acquired a substantial amount of information that can expand the future of Essex bank. Being given the capstone topic of attracting the next generation as customers  has allowed me to view the bank through a different lens. Not only have I sought out promising ideas for the future, but I have also uncovered obstacles internally that can be addressed. Through research, interviews, and experience I am able to provide various strategies that may attract the next generation as customers. 

To begin with, I must identify what exactly is the meaning of the next generation. As most know, generations are grouped between birth years. People can associate themselves with those groups because of commonly shared experiences. As of today, there are four generations that exist: Baby Boomers, Gen X, Millennials, and Gen Z. The next generation that I am referring to are the later Millennials and Gen Z. Members of the Millennial generation are born between 1980 and 1994. Members of Gen Z are born between 1995 and 2015. The reason I say the later years of the Millennial generation is because those are the individuals who are closer in similarities with Gen Z. The two main causes of separation between the younger two generations versus the older two are technology and culture. It is proven that the top level positions within different corporations and industries are run by older generations. In an article written by Kari Barbis on the ABA Banking Journal she comments, “with the exception of the technology industry, you’ll be hard pressed to find a millennial—or, for that matter, Generation X—board director at most companies. Banks of all sizes fall into a similar trend, with only 16 percent having a director 40 or younger on their board, according to a recent survey by Bank Director magazine.”  Subsequently, in order to target the later years of Millennials and all of Gen Z, the Baby Boomers and Gen X must adopt the latest technological and cultural trends that are being introduced. Now since the background has been laid out, some strategies towards attracting the next generation as customers can be discussed. To attract Generation Z and Millennials as customers, my strategy will focus on three main categories: community, technology, and organizational structure. 

To start, What is the biggest advantage that a mid-size bank like Essex has over top tiered banks? The answer is in the name, Essex bank is a community bank therefore their best advantage is the community. The concept of smaller banks supporting towns and communities has been around for hundreds of years. These small banks are the reason families and businesses have been able to continue to thrive for centuries. As time goes by, and bigger banks evolve, there has been a shift from individuals banking at their local bank to larger, national banks. But how does a smaller bank, with less resources, attract those people back? In order to make this progression, Essex Bank needs to have a more significant impact within the community. It has been proven by the Pew Research Center that millennials and Gen Z’s are more social and value the extracurricular aspects of life. So, in order to affect these generations, why not have a bigger impact in their personal lives? Branding a company with community effort is much more cost efficient and genuine than traditional marketing tactics. That being said, I have come to understand that there are multiple volunteer efforts, such as Jean Friday, that encourages employees to donate to local charities. My point, is that the “community” is a community bank’s “x-factor,” and Essex should have a deeper presence. 

During my internship, I was able to spend time at three different locations: Deep Run, Winterfield, and West Broad. Surrounding these locations, are twenty-two schools to include elementary, middle, and high schools within a ten mile radius. Every student at these schools falls into the Gen Z category, so in order to attract them as customers, Essex should be more involved in school and community events. Small gestures such as donating to a school’s annual 5k race and having a small vendor, can make a difference. I do understand that it is each branch’s responsibility and choice determining what community outreach programs in which to participate. However, it is my opinion that there isn’t enough going on. The majority of adolescents are at the bank institution as their parents. By positively affecting the lives within the community at an early age, it will be easier to get entire households to bank with Essex. Simple benefits, such as a monetary incentive for opening a savings for anyone under the age of eighteen, can highly encourage parents to open up an account for their child. Having this savings account as a child can expand into a cash back checking once they enter the workforce. 

Building off of school involvement, it is extremely important that financial literacy is continued and improved within the youth and young adults. Kathrine Curtiss wrote an article on Global Citizen stating, “generationally speaking, the millennial generation is the hardest hit by their lack of financial knowledge-81% have long-term debt. This age group is also taking from their retirement accounts and overdrawing from their bank accounts to make ends meet.” Thanks to bank lobbying, a finance course is now required in Virginia state schools, but from research and talking to individuals who have experienced the course, these classes aren’t taken serious and hold no value to students. Community banks like Essex Bank should take initiative to strengthen the financial literacy programs over what the school systems currently provide. In theory, a more financially aware youth would lead to less debt as a young adult in the workforce. With more money to invest, then there will be more money under the bank’s control. This cycle produces a financially healthy community. 

Moving past the community aspect of banking, it is obvious to say the future of banking is in technology. Technology is a major focus for the younger two generations since they have known it their entire lives. Advancements with online banking, mobile banking, and e-statements have changed the consumer’s banking experience. We now see less use of “brick and mortar” and a heavy focus on technological innovation. Products such as safety deposit boxes are no longer as significant to customers. The America Banking Association (ABA) Bank Marketing released an article in 2017 explaining, “online and mobile banking continue to grow in popularity and together represent the primary banking channels for two-thirds of Americans, according to a new survey conducted by Morning Consult for the American Bankers Association.”  As a smaller community bank, it is challenging to develop technology versus a larger bank like BB&T. Nonetheless, it is vital that Essex Bank does its part to stay on top of the curve and not fall behind. Technology like Zelle, which allows individuals to transfer money to each other’s accounts replicating FinTech’s such as Venmo are becoming increasingly popular. Other features such as video calls on the online platforms to assist with customer problems can be useful. Online personalized financial management tools that analyzes payment histories and groups them into similar categories, allowing customers to develop savings plans are promising ideas. Moreover, when developing these accessories it is important that they are user friendly and compatible with a plethora of platforms to avoid customer problems. When designing the wide range compatibility, cyber security is a vital focus. At this point in time, the different ways hackers induce fraud can be extremely detrimental to both customers and the institution.

Another aspect of technology that is important to focus on is social media usage. Social media platforms such as Facebook, Twitter, LinkedIn, and Youtube are widely used between all generations. According to a research study report by Simon Kemp on We Are Social, “The number of people using the internet has surged over the past year, with more than one million people coming online for the first time each day since January 2018.” Of all generations, the Gen Z’s and Millennials are the most involved. If one were to pull up Essex Bank’s Twitter page, along with three other community bank pages, it would be almost identical. Essex Bank should stand out from the competition by tying back to the community presence approach. Sharing those genuine interactions to the world can continually spread the involvement of Essex Bank. A great example of showcasing involvement is Essex Bank’s Winterfield branch. Their Facebook page during the school year holds polls for followers to vote on. These followers determine the athlete of the week at James River High School. If more branch’s adopt this type of outreach, Essex Bank can stand out from the rest. Also, short financial literacy videos could be posted to continue to assist young professionals dealing with debt. A challenge Essex bank faces with developing effective content is strict regulations from organizations such as the Federal Deposit Insurance Corporation (FDIC). But one trending post can multiply views on Essex Bank’s social media platforms.

Lastly, the structure of retail banking is drastically changing in numerous ways. Many bank leaders believe that automated tellers and universal bankers are the future of banking. Automated tellers is an autonomous machine that will be able to handle basic transactional needs, while the universal banker can assist with financial problems. Today, we already see this emerging with the Capital One cafes. These cafes offer an experience that is both modern and efficient. For Essex Bank to take an approach like this, there would need to be a change in strategic focus going into the future.In rural areas, customers still value a face-to-face personal experience that they are unable to receive at larger institutions. In urban cities, there is a bigger demand for efficiency within the bank. An “Essex Bank cafe” wouldn’t be as effective in Louisa, VA as it would be in Annapolis, MD. Despite the challenges faced by younger generations not valuing brick and mortar, transacting large sums of money attracts the face-to-face interactions. To appeal to both older and younger generations, the design and layout of retail branches are evolving. The standing teller booths are transitioning to a more inviting, sit down interaction. Essex Bank has adopted this technique, but should push it out to more branches to create more uniformity. Younger generations like to feel welcomed and accepted, so when they do visit a branch, it is important that they value the experience. 

In conclusion, the future of Essex Bank is bright as the banking industry is innovating many new ideas. For the next generation to be attracted, a focus on community, technology, and organizational structure needs to be improved. A larger community involvement is both the responsibility of the community bank and its benefit. By creating, maintaining, and spreading valuable relationships Essex Bank will be able to effect the Millenials and Gen Z. Furthermore, by staying on top of the online and mobile advancements along with trends, Essex Bank will continue to expand.