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One fifth of the US population was born between 1997 and 2012. Instead of spending, Gen Z is saving—but when it comes to choosing a place to keep their money, not all financial institutions pass the vibe check.

Gen Z and The Next Generation of Banking


How Do You Assess a Mortgage Applicant With Three Gig Economy Jobs, an Attention Span of Eight Seconds, and a Crypto Wallet?

One fifth of the US population was born between 1997 and 2012. This demographic is known Gen Z and, as true digital natives, not only are they unique in history, but they also represent a real challenge to banks.

Serving Gen Z banking customers in a way they relate to is going to be a game-changer for bank leaders, and creating strategy within the context of a regulation-heavy industry, with many legacy procedures, will be a tightrope walk for some.

A common mistake is to think “we are already engaging with millennials, what’s the difference?” But Gen Z is a whole new ball game. Most of the “older sibling” millennials were born into an era without widespread internet use — and this, research has shown, makes a difference. Millennials straddle the two eras; Gen Z does not.

So, what’s so different about Gen Z, and what does this likely mean for banks?

Download: What is Gap Z and what does it mean for your bank?

They’re multi-earning, and earning differently

82 percent of Gen Z have their sights set on homeownership. But one of the biggest challenges for mortgage providers and other lenders will be that Gen Z earns money in different and sometimes unique patterns. 

This generation will need to be evaluated from a credit perspective in an entirely different way, and a W-2 form alone will be unable to reveal the full picture. The usual metrics for assessing a customer for a mortgage (e.g., judging size of salary and previous credit history) won’t work as well for Gen Zs working in the gig economy or as freelance contractors — who can be highly paid, but unsalaried — or those getting paid in crypto currency. Banks are going to need new ways of judging income, and assessing likelihood and fitness to repay mortgage loans. 

Savvy platforms will assist this generation in making money. Whether that’s through services rentals like Airbnb, or creator platforms that support unique content such as NFTs, art, or blogs. Influencer platforms like YouTube and TikTok will play a prominent role and banks may enhance success by working with them.

Gen Z are tech sophisticates

Recent research shows that 83 percent of Gen Z consumers report being frustrated with bank processes, which implies that banks and other financial institutions will need to examine their customer experience at a micro level to please younger customers and develop loyalty.

Gen Z is adept at using technology and isn’t confused by more sophisticated offerings — they naturally take a “technology first” approach. Banks will be able, incrementally over time, to spend less on support services for the those who don’t understand sophisticated online offerings, and more on creating the best online-only experiences. Gen Z is also prepared to use tools such as robo-advisers to advance financial health.

Social justice counts to the Gen Z buyer

Gen Z wants to change the world. They are highly informed and engaged with social and environmental issues. They actively seek out socially responsible investment in companies that are vested in helping bring change about. They care about diversity, equal representation, climate change, health care, mental health and higher education.

Gen Z will expect their banks to uphold principles they hold dear. Lip service is no longer good enough — Gen Z wants to see true action and commitment.

Together we Tearsheet, we have produced a podcast series that explores Gen Z and their relationship to financial services. Find out what it means to capture and delight them.


They have a shorter attention span

Research has shown that Gen Z has an average attention span of 8 seconds. If you don’t grab their attention fast, you lose them, potentially permanently. They spend an average of eight hours a day on their phones, and many of them are heavily engaged in social media and online gaming. Gen Z wants smart snippets of information. They are not going to tolerate some of the lengthy processes that banks have today, and the way most banks currently engage will not engage them.

Engagement will have to become more intuitive. Gen Z is also keen on fast returns on investment, and banks will need to find with ways to deliver gains or manage expectations without taking on risk.

They’re savvy

Research shows that Gen Z are very interested in finance — it is a mistake to take them as fools or lightweights. Banks will need to engage with and create communities where different markets are available and other education is available.

Gen Z ranks understanding finance as a high priority and this presents an opportunity for banks as purveyors of financial literacy. This generation will turn to online sources to educate themselves, along with learning from their parents.

They are used to personalization, likely to engage in the metaverse and happy to try new things

Gen Z is used to personalization via online retail shopping. Financial services firms will need to use data at a granular level to ensure that young people are reached in a way that shows they are “known” and “understood.”

Gen Z will expect immersive experiences and banks will need to consider the use of VR and AR both for engagement and service delivery. Perhaps there will be intelligent avatars to help educate this knowledge-hungry generation.

Gen Z is broadminded and will explore new tools. For example, they are already accessing BNPL to avoid traditional credit.

Gen Z is curious about digital assets and crypto

Gen Z is interested in crypto, as its qualities support their beliefs around eliminating middlemen and un-locking the under and unbanked population. They are also more likely to understand what digital assets are and be interested in them. That doesn’t mean that the majority will dive straight in and buy NFTs or manage their finances in crypto, but as the space develops and becomes more regulated, they are more likely than previous generations to be open to a new way of using money.


Is Traditional Banking Underrated in the Digital Age?

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David Donovan
David Donovan
Executive Vice President, Publicis Sapient