Gen Z to pioneer Bangladesh's digital bank revolution, but not without challenges

In the heart of South Asia, Bangladesh is poised for a financial revolution. The Bangladesh Bank is set to approve the establishment of digital banks — a groundbreaking development in a nation where traditional banking has long been the norm. These digital banks promise to reshape the financial landscape, and at the forefront of this transformation is a generation like no other: Generation Z.

Generation Z or Gen Z, born between 1997 and 2012, represents not only the future but also the driving force behind the transformation of the banking sector in Bangladesh. With ages ranging from nine to 24, they are poised to become the majority of the workforce by 2030. Gen Z's unique characteristics and experiences set them apart from any previous generation, making them the ideal architects of Bangladesh's digital banking future.

Gen Z's status as a digitally native generation is their defining feature. Unlike their predecessors, they cannot recall a world without smartphones, instant access to information, or social media platforms. These technologies have seamlessly woven themselves into the fabric of their identities. Gen Z navigates the digital realm effortlessly, positioning them as the torchbearers of the forthcoming digital banking era.

The digital advantage of Gen Z in banking

In a country boasting around 61 scheduled banks and 35 non-bank financial institutions (NBFIs), the advent of digital banks promises to be nothing short of a revolution. Gen Z's familiarity with technology and remarkable adaptability make them invaluable assets in this transformative journey.

Gen Z's upbringing in the digital age has endowed them with a deep understanding of cutting-edge financial technologies. They are poised to design and implement innovative digital banking solutions tailored to the unique needs and aspirations of the Bangladeshi populace.

Gen Z's global consciousness and exposure to diverse perspectives make them naturally empathetic and customer-focused. They have the potential to develop banking solutions that address the varied and nuanced financial challenges faced by different segments of society.

The seismic events of the pandemic played a pivotal role in shaping Gen Z's values and expectations. Emerging from isolation, they are characterised by a heightened focus on health and wellbeing, coupled with a preference for flexible or remote work. This adaptability positions them to design banking services that align seamlessly with the evolving needs of a modern workforce.

Demographic benefits for banking in Bangladesh

The infusion of Gen Z into the banking sector brings forth several demographic advantages, setting the stage for a dynamic and inclusive financial landscape. 

With a predominantly youthful workforce, the industry is infused with fresh ideas, boundless energy, and a fervent desire to challenge the status quo. This youthful dynamism is a driving force for innovation and growth.

Gen Z's commitment to inclusivity and its embrace of diversity fosters a more inclusive financial sector. This inclusivity ensures that the banking industry caters effectively to the diverse needs of the Bangladeshi population, fostering financial inclusion.

Bangladesh has the potential to position itself as an innovation hub for digital banking in the region. Gen Z's technological prowess and global awareness draw talent not only from within the country but also beyond its borders, propelling the nation to the forefront of digital finance.

Economic and social benefits

The impact of Gen Z on the digital banking sector transcends the financial realm, offering far-reaching benefits to the economy and society from economic growth, financial inclusivity and global integration.

The advent of digital banks and the involvement of Gen Z in this sector is creating a plethora of new job opportunities. This, in turn, stimulates economic growth and positions Bangladesh as a burgeoning financial powerhouse in South Asia.

Gen Z's steadfast focus on inclusivity also drives financial institutions to develop products and services that bridge the gap and reach previously underserved segments of the population. Their commitment to ensuring that no one is left behind plays a pivotal role in promoting financial inclusion.

Leveraging their global awareness and connectivity, Gen Z bankers are well-equipped to facilitate international collaborations. This fosters cross-border financial partnerships, propelling Bangladesh onto the global stage in the realm of digital finance.

Challenges of engaging Gen Z

While Gen Z holds immense promise for digital banks in Bangladesh, their engagement is not without challenges. 

Gen Z is accustomed to quick, bite-sized information and entertainment, which can pose challenges for in-depth, long-term financial planning and analysis. As digital natives, they may sometimes underestimate the importance of robust cybersecurity measures, potentially exposing the banking sector to security threats. Gen Z's heavy reliance on technology may lead to reduced face-to-face interactions, potentially impacting the personal touch that is often essential in banking.

In conclusion, Bangladesh stands at the threshold of a new era in banking, one where digital banks will redefine the financial landscape. Generation Z, with its unique attributes, technological acumen, and unwavering commitment to inclusivity, emerges as the vanguard of this transformation. While they offer immense advantages, their engagement also presents challenges that must be met with strategic planning and adaptation. 

The synergy between Gen Z and the banking system promises not only economic growth but also financial inclusion and global integration, heralding a new dawn on Bangladesh's financial landscape. Gen Z is not just the future of banking; they are the architects of a brighter financial future for all in Bangladesh and beyond, but it's a future that must be navigated thoughtfully and securely.

The author is an economic analyst and finance and business strategist.