AI, new generations and consumer finance
Koray Öztopçu, Head of Consumer Finance at Garanti BBVA, recently penned an Op-Ed piece on artificial intelligence (AI), new generations and consumer finance. In his article, he claims that Generations Y and Z account for a growing slice of the consumer pie, thus requiring brands to pursue creative strategies on various fronts, from the relationship they build with consumers to the values they embrace. They must also keep up with new technologies if they hope to offer creative digital financing options. Notably, a technological tidal wave is triggering transformation in many sectors and processes, from production all the way through to consumption.
Öztopçu explains that while consumers are rapidly diversifying within the financing ecosystem, there is a genuine need for new generation financing products capable of responding to this diversity: “Seizing and developing technological opportunities, especially AI, enables companies to develop new production methods and tools, do a much better job at sizing up their competitors, and build creative competitive strategies.”
As Generation Z enters its peak earning years, it has become the target of all sectors of the economy, Öztopçu notes. Generation Z prioritizes convenience over everything else, and appreciates special, innovative financial benefits, such as promotions and discounts. Öztopçu reports that Gen Z’ers also do a lot of their shopping on social media, but always after doing proper research, and rarely on impulse. To help them, they browse online channels and watch videos if necessary.
According to Öztopçu, this generation looks for the same perks and promotions when they are looking for financial products, such as loans, interest rates, and payment flexibility. In fact, when offered by brands, it builds greater customer loyalty among Gen Z’ers - even more so when the brands develop financial products that are customized to meet their needs.
Öztopçu explained that if a consumer uses a product developed in collaboration by brands and financial institutions, they visit the brand’s mobile app or website three times a month on average, and these visits convert into sales. During this transition period, the use of these hybrid structures is bound to become more widespread, as they are especially good at engaging with the customer, helping brands understand their needs and guiding them.
Therefore, according to Öztopçu, if consumer finance companies or banks insist on using traditional databases, they must be ready to work harder to offer new products that can keep up with changing consumer financing trends and lending habits.