How Gen Z Are Shaping the Future of Banking

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Ryan Kaye

- December 21st, 2021

online banking

Online banking has existed for 20 years, but teens and young adults are now changing how it’s being used through Gen Z banking. These digital natives are taking control of millennials and, no doubt, setting future gen Z banking trends.

Alongside Millennials, the Gen Z demographic makes up the largest percentage of the resident population in the US, as of 2020. Similar figures can also be seen in the UK from 2019 (Statista).

Nowadays, most of them are still children rather than bank customers. That said, they can still set the pace for how the industry will progress. The reason for this is that some kids get their smartphones when they’re as young as six years old and they’re allowed a personal social media account when they turn 13 years old

What’s more, there’s now a debit card for kids called GoHenry. The prepaid debit card and the app teach little ones how to budget, so they know the difference between needs and wants by spending sensibly. 

Parents can add money onto it and guide their progress with real-time updates, personalised controls, and loads more. There’s nothing like introducing them to banking young, right?

Understanding who gen Z fintech natives are

ZoomersGen Z doesn’t just use smartphones, they’re glued to them. Snapchat discovered that worldwide mobile penetration rates among Gen Z are as much as 97 per cent and, on average, in 2019, the daily usage was roughly five hours and 15 minutes.

The banking customers of tomorrow are currently between the ages of 6 and 24. The higher end of this age group have opened their first bank account in the last eight years – some guided by their parents. This could be why they prefer to step into a bank branch instead of opening an account online. 

However, 37.5% of Gen Zers would only use an online or digital bank (Fintech News), a significant enough amount for FinTech to think about the future change in the framework of their industry.

Gen Z is the first “neo” or “true digital native” generation. In comparison to their “digital native” counterparts – i.e. the millennials, they’re likely to have “more positive attitudes towards the Internet and lower anxiety scores about the Internet and higher web, e-mail, and social media usage.” (

They’re also very brand-aware:

“In a transparent world, younger consumers don’t distinguish between the ethics of a brand, the company that owns it, and its network of partners and suppliers. A company’s actions must match its ideals, and those ideals must permeate the entire stakeholder system.

“Gen Z consumers are mostly well educated about brands and the realities behind them. When they’re not, they know how to access information and develop a point of view quickly. If a brand advertises diversity but lacks diversity within its own ranks, for example, that contradiction will be noticed.”

 McKinsey & Company, November 12th, 2018.

Banking the gen Z way

Despite negative implications that may come with a cashless society, we’re likely heading in that direction.

Gen Z is more likely to engage with cryptocurrency. They are also more money savvy and are described as “savers” rather than “spenders” when compared to millennials. Additionally, 22% of Gen Z make money online (Forward Partners).

As a response to the younger market, a huge amount of “challenger” and “digital” banks, as well as banking apps have gradually popped up in the UK alone.

Some examples include:

  • Monzo
  • Revoult
  • Revoult Junior
  • Starling
  • Monese
  • Curve
  • Chip
  • Cleo
  • GoHenry
  • Treecard
  • Yolt
  • Zopa

The ones in bold above are likely to be more suited to “Zoomers”, a nickname for Gen Z. Some of these apps aren’t banks per se. But because budgeting and saving are key focus areas for Zoomers, apps that monitor spending help create workable budgets and reward users for keeping on track have been popular recently. Cleo, for example, uses a chatbot with “gamification” integrated, powered by AI.

Is the future digital?

According to a report this year by Business Insider, digital banking is already booming. Tech-savvy millennials and Gen Zers have been at the forefront of the shift, particularly focusing on Gen Z’s gravitation towards mobile banking. 

Digital-only banks, otherwise known as neo banks, are transforming banking. The Covid-19 pandemic has helped to accelerate this. Additionally, API (application programming interface) – a technology that allows banks to communicate with third-party apps – has made apps such as Cleo and Yolt possible. Blockchain technology is also being trialled by central banks. The technology first used by digital currencies starting with Bitcoin makes for a smoother-running system.

What does generation Z want in banking?

Generation Z sign

Frictionless, bespoke experiences are crucial to Gen Zers. Growing up in an age of Amazon, TikTok, and Netflix, Gen Zers want hyper-personalised experiences. So, banks, customers, and investors should invest in next-generation technology to develop mobile and digital banking platforms, as this is the infrastructure needed to meet the needs of this generation.

In doing so, they’ll have the ability to provide Gen Z with seamless, intuitive experiences for taking care of financial errands such as paying bills together with using mobile apps to get solutions to finance-related problems.

The capacity for banks, customers, and investors to maintain and entice Generation Z also depends on delivering and creating highly bespoke banking experiences. A Zafin consumer banking survey, for example, found that 64% of the Gen Z demographic seek a tailored banking experience with service and product recommendations suited to their personal circumstances.

It seems pretty clear that banking has already turned digital. Traditional banking, however, is not going to disappear overnight. And who’d have thought a six-year-old would have a debit card? What’s the generation after Gen Z going to be – Gen 2.0?! There aren’t any more letters in the alphabet. Who knows what’s in store.

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