This article is part of our series Gen Z Banking Trends, where we uncover the ins and outs of Gen-Z banking preferences.

Understanding Generation Z in the Banking Landscape

The banking industry is at the cusp of a major generational shift as Generation Z (Gen Z) comes of age. Born between 1997 and 2012, Gen Z makes up almost 21% of the U.S. population and their unique behaviors, values, and unparalleled tech fluency will redefine and reimagine banking. With 68 million Americans in this category, this demographic shift represents a sea change for marketers in the financial services industry, one that demands innovation, adaptability, and a deep understanding of this generation's unique financial mindset.

The Defining Traits and Preferences of Gen Z in Banking

1. Gen Zers are true digital natives.

According to YPulse’s tech/device usage report, the average Gen Zer received their first smartphone at the tender age of 12, earlier than any previous generation. This early exposure has resulted in a cohort for whom digital engagement is not just a convenience but a necessity, with 80% claiming they cannot live without their smartphones. Accustomed to the convenience and personalization offered by Big Tech, this generation places high trust in companies like Apple as financial service providers, indicating a potential competitive threat to traditional banking institutions.

For Gen Z, the digital experience is paramount:

• Only a third of Gen Z and Millennials initiate deposits in branches, compared to nearly 60% of Baby Boomers.
• The importance of a bank's mobile app cannot be overstated, with 55% of Gen Z considering it essential.
• 82% of Gen Z respondents indicated they would switch financial institutions for superior digital experiences, as per Business Insider Intelligence.

2. Gen Z craves personalized guidance and advice

Approximately two-thirds of Gen Zers are currently saving for key financial goals amid an inflationary environment and they’re looking for advice on how to overcome financial headwinds. Their loyalty and business will go to the institutions who take the time to get to know them while providing personalized digital advice and financial literacy content.

3. Gen Z is socially and environmentally conscious

They prioritize investments in companies that resonate with their values and contribute positively to the causes they care about. This trait suggests that banks and credit unions targeting Gen Z need to demonstrate not just financial acumen but also a commitment to community and sustainability.

Embracing the Future with Gen Z

Looking at #2 and #3 above, Gen Z should be flocking to small banks and credit unions, which pride themselves on their deep community roots and meaningful relationships with depositors. But they aren’t. Only 12% of Gen Z use community banks.

Small banks and credit unions that rise to the challenge and create the digital banking experience that Gen Z demands will succeed, not only in growing their deposit base, but in ushering in the next era of banking, one that is more creative, inclusive, and technologically advanced.

Are digital hurdles slowing your deposit growth? Symphonize helps banking institutions elevate their digital customer experience to match Gen Z's expectations. Click here to book a quick 30-min discovery call and let's tackle it together!

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