06Jun

With Gen Z — that generation born after the mid-1990s — beginning to earn their first paychecks, the establishment banking industry is rushing to sign them up and capture their loyalty before they decide to go with a fintech startup.

“Financial marketers must reach out to this generation right now or their window of opportunity may slam shut forever,” cautions The Financial Brand’s Executive Editor Steve Cocheo.

The dire warning is based on a report from Raddon Research which says 8-in-10 Gen Zers are “open to and excited by nontraditional financial services” or “love digital banking channels” and prefer avoiding in-person banking, even if they consider traditional banks necessary.

It’s especially urgent for credit unions and community banks to move quickly and decisively, because they’re still playing catch-up for the business of millennials who gravitated to the nation’s biggest banks. Credit unions are doing better, but community banks, according to research cited by The Financial Brand, are struggling to capture younger banking customers.

Geography, which used to be the primary influencer on where a customer chose to bank, has a far less important role since the advent of digital banking. When you need cash, ATMs are ubiquitous.

It seems a reasonable case to make that the banking industry as a whole, and smaller banks in particular, needs to develop products and offerings geared to the Gen Z market.

But a Forbes article says, “Don’t believe it.”

“Warnings like this are reminiscent of those from 10 to 15 years ago regarding millennials. Roll the clock forward to today, and three megabanks — Bank of America, Chase, and Wells Fargo — have 44% market share of millennials. And they were hardly the ones ‘decoding’ millennials before it was “too late.”

So who should banks be pursuing with vigor? Baby boomers, writes Ron Shevlin, managing director of fintech research at Cornerstone Advisors.

He doesn’t suggest ignoring Gen Z, just that banks gave at least equal time to older customers. Three trends make boomers different from the generations that preceded them:

  1. They are working longer and many are taking part-time jobs in retirement to keep busy and supplement their income.
  2. Family dynamics are changing how money is handled and debt is incurred. Many boomers have taken over the financial affairs of their aging parents.
  3. Healthcare is becoming a greater concern due to rising costs and worries about incapacitating illnesses and the need for long-term care.

Concludes Shevlin: “The oldest boomers are just in their mid-70s. The challenges listed here are more prevalent among consumers in the late 70s and early 80s, however. This means there is a window for new product and service development. With the youngest boomers in their late-50s, it also means that the life cycle for these new products and services could run for the next 30 years.”

Photo by Eduardo Soares on Unsplash

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Green Key
Jun 6, 2023

Security a Concern For Accountants Working Remotely

As the coronavirus continues to spread, a growing number of companies are telling employees to work from home.

While it is one way to avoid exposure to the virus, remote work presents a unique set of problems for companies unprepared to conduct business entirely or even partially over the internet. Besides the potential for overtaxing in-house systems and inadequate connectivity at home, cybersecurity concerns present an even greater concern. With tax season well underway, few sectors are at greater risk than accounting firms.

Phishing scams typically increase during tax season as cybercriminals attempt to obtain sensitive financial information from unsuspecting taxpayers. This year could see a rise in these and other attempts.

Citing guidance from the Secret Service, AccountingToday cautioned that, “Cybercriminals are exploiting the coronavirus through the wide distribution of mass emails posing as legitimate medical and or health organizations.”

Monique Becenti, of the website security solutions provider SiteLock, told AccountingToday, “Companies should be communicating cybersecurity best practices — don’t click on links; don’t download any attachments. Cybercriminals could also take advantage of remote work by impersonating someone from HR.”

Many accounting firms have already taken steps to limit direct contact with clients, encouraging them to submit documents through encrypted portals and to meet via phone or video conferencing, rather than schedule in-office meetings.

At Paramount Tax and Accounting in Georgia, Chris Hardy says, “We’ve been trying to get more clients to use the portal and upload their documents since the outbreak. We’ve been stressing to every client to use this avenue along with Zoom for video conferencing if they have questions.”

However, options like these are more limited when working remotely. In an advisory memo, the Skadden, Arps, Slate, Meagher & Flom law firm advises, “Companies must review what cybersecurity controls are in place, or need to be supplemented, prior to initiating or significantly expanding remote working technology.”

CPAs and enrolled agents are certainly sensitive to client privacy and confidentiality, but working remotely they may not be as aware of the different kinds of risks.

“Employees working remotely are more likely to forward company information to personal email accounts or to store information on unprotected laptops or other devices,” the law firm notes, adding that training and reminders about security is essential.

“The ease of using personal services and devices coupled with insufficient cybersecurity protections or noncompliance with company data retention policies can create significant risks of data leakage or unauthorized access.”

Photo by FLY:D on Unsplash

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