The Gen Z and the banking sector
Published on 14 de November de 2023

With the eldest members of Generation Z entering the workforce and beginning their financial journeys, banks are keen to understand and engage with this pivotal demographic. This generation, encompassing those born between 1997 and 2012, are tech-savvy, socially conscious consumers raised with the internet at their fingertips. Their banking habits and preferences differ significantly from previous generations, requiring banks to adjust their strategies.

Banks also need to focus on Generation Z because they constitute a rapidly growing market. By 2025, Gen Z is expected to represent 27% of the global population and possess up to $33 trillion in assets (McKinsey & Company). Additionally, they are also known for their brand loyalty, with 63% preferring to stick with brands they trust (KPMG), so establishing strong connections would allow banks to secure long-term customers who will continue to use their services in the future.

However, a significant part of Generation Z is sceptical and disinterested in the banking sector, that’s why, banks need to proactively reshape their image, showcasing modernisation through digital solutions and their role in addressing social challenges, such as financial inclusion and environmental sustainability. By focusing on technological solutions and emphasising their positive social impact, banks can become a more attractive option for the next generation.

2. What are the emerging trends in Gen Z banking?

Some of the Gen Z emerging trends are:

1. A data-enriched digital service: Gen Z prioritises banks that have a efficient digital system that allows them to manage their expenses well, and that displays their payment data in a clear and transparent way.

2. Digital payments: Gen Z are the first to grow up with the internet and smartphones, which explains their inclination towards mobile banking and digital payment applications rather than traditional banking methods.

3. Peer-to-peer lending: they are significantly more open to alternative lending options, such as peer-to-peer lending, where one individual borrows money from another and vice versa, through the management of a traditional financial institution.

4. Artificial Intelligence: this generation is also looking to their financial institution to leverage the latest technologies such as artificial intelligence (AI) and machine learning to personalise financial products and services.

In addition, untapped opportunities within the financial sector for Generation Z lie in incorporating financial education and planning tools into conventional banking platforms. In addition, there is a significant opportunity for financial institutions to use social media and various digital channels to connect with and engage younger customers.

3. What problems do banks have in reaching this Gen Z?

There could be a variety of problems, for example:

1. Low adaptability to change: Financial institutions, such as banks, can sometimes be reticent about incorporating new technologies and adapting to changing customer preferences, which can hinder their ability to meet the evolving needs of Generation Z.

2. Lack of analysis: Banks may not have a full understanding of the preferences and needs of Generation Z customers, which could result in missed opportunities to serve this demographic.

3. Limited digital capabilities: The lack of full adoption of digital banking technology by some banks could make it difficult for them to attract and retain Generation Z customers, who have a strong preference for mobile banking and digital payment apps.

In conclusion, must-haves for Gen Z customers include easy and convenient access to financial products and services, transparent and fair pricing, and a strong focus on digital and mobile banking.

In order to engage Generation Z, banks need to understand their particular banking habits and preferences. Statistics show that this generation prioritises online banking and companies with transparent digital services that offer them innovative and information-enriched organisation of their finances.

If you are looking for technology solutions that help you connect with younger generations, achieving payment data enrichment to improve your services and your profits, do not hesitate to contact us.