The news: Truist bought fintech Long Game for an undisclosed sum as the US bank looks to boost engagement with younger customers, per a press release.
Here’s how it works: A self-proclaimed gamified finance app, Long Game uses prize-linked savings and casual gaming to incentivize customers to better manage their finances and improve their financial literacy.
Youth banking booster: Our research has found that Gen Zers have a tendency to distrust traditional financial institutions (FIs)—for example, just 11% of women and 19% of men have sought financial advice from a bank or credit-union associate. But almost half (47%) aim to improve their credit scores and 46% want to establish and keep to a budget, according to Marcus.
Truist can use the Long Game app to better cater to this demographic and move away from the stuffy, institutional image that traditional banks may hold in their minds. Mobile financial tools and the casual game-like approach integrated by Long Game can help with this.
Other FIs have also aimed to shape a new image to appeal to younger consumers. This includes Goldman Sachs, which rebranded its Marcus direct bank to help build client trust within the same younger demographic.
The big takeaway: Innovative fintechs can help banks and established FIs to attract new and younger customers and benefit from Gen Z’s over $360 billion spending power. Younger consumers will be more drawn to fintechs’ tool-like apps than less tech-savvy older generations and will be more familiar with the gamified approach to personal finance which Truist is embracing.
Buying nimbler fintechs is often quicker and cheaper for incumbents than building technology internally and lets them target more specialized and difficult-to-reach demographics. Fintechs can, in turn, benefit from banks’ wider ecosystems and vast resources to scale. Legacy banks have realized that what Gen Z and millenials want is very different from what their parents’ generation wants—and they are adapting accordingly.