Gen Z & the future of banking. 6 key trends to understand Zoomers

Are Banks ready for Gen Z?

While Baby Boomers have the most purchasing power, and Gen Y is the biggest generation group, it’s Gen Z that’s growing the fastest. In fact, by 2034, Zoomers will overtake US millennials as the US’ largest cohort.

In 2024, the oldest of them are already in their late 20s, and they definitely are a consumer group banking institutions need to reckon with.

So, who’s Gen Z? And how can banks attract them? Here are 8 insights to consider when developing banking software for Zoomers.


Key points

  • Demographics and Growth: Gen Z, born between 1996 and 2012, is set to become the largest U.S. cohort by 2034. As of 2024, they range in age from 12 to 28.
  • Characteristics of Gen Z:
    • Digital Natives: Highly adept with the internet and digital tools.
    • Diverse and Inclusive: The most tolerant and diverse generation historically.
    • Entrepreneurial: Likely to start businesses; engaged in social justice.
    • Financial Mindset: Prioritizes financial security; open about mental health.
  • Banking Preferences and Insights:
    • Phygital Banking: Gen Z prefers a blend of digital and physical banking experiences.
    • Social Media Influence: They rely on platforms like YouTube and TikTok for banking information; they’re susceptible to financial scams but also wary.
    • Sustainability and Ethics: 64% of Gen Z’ers might switch banks over inadequate ethical practices; they’re inclined toward ESG investing.
    • User Experience: They prefer mobile-first designs and personalized banking experiences.
    • Investment Behavior: Gen Z starts investing early; they prefer cryptocurrencies and are cautious about traditional investment vehicles.
  • Strategies for Engaging Gen Z:
    • Personalization: Tailor experiences and products to individual preferences.
    • Agility and Technology: Emphasize rapid adaptation and innovation, utilizing AI and cloud computing for enhanced security, automation, and personalization.
  • Challenges for Banks:
    • Traditional banks struggle with outdated systems, while fintechs thrive on agility and innovation.
    • It is necessary to understand Gen Z’s unique needs and expectations to effectively serve and retain them as customers.

Who are Gen Z?

Generation Z, also known as Zoomers or iGen, is the demographic cohort succeeding Millennials and preceding Generation Alpha. Researchers and popular media use a starting birth year range of between 1996 and 2012. In 2024, Gen Z will be between the ages of 12 and 28.

Characteristics of Gen Z

  • Digital natives: Gen Z is the first generation to grow up with the internet and social media as an integral part of their lives. They are highly tech-savvy and comfortable using digital tools for communication, learning, and entertainment.
  • Diverse and inclusive: Zoomers are the most open-minded, tolerant, and racially and ethnically diverse generation in history.
  • Entrepreneurial and ambitious: iGen is known for its entrepreneurial spirit and ambition, and it is more likely than previous generations to start their own businesses.
  • Socially conscious: Gen Z is passionate about social justice and environmental issues. They are actively engaged in making a positive impact on the world. Gen Z is passionate about social justice issues such as LGBTQ+ rights, racial equality, and gender equality.
  • Mental health: Zoomers are more open about mental health than previous generations and are more likely to seek help for mental health issues.
  • Financial security: Gen Z is concerned about financial security and is highly motivated to save money and learn about banking and finance from a young age.
  • Authenticity: Gen Z values authenticity and is more likely to support brands and leaders that are true to themselves.

What zoomers want from the financial industry?

What do you need to attract Gen Z to your bank?

1. Let’s get phygical!*

Phygical banking is a term used to describe the combination of traditional brick-and-mortar banking with digital banking channels, such as online banking and mobile banking.

The goal of phygical banking is to provide customers with the best of both worlds: the convenience of online banking with the personal touch of in-person service.

Examples of phygical banking:

  • A traditional bank with a mobile app and online banking platform.
  • A credit union with a network of ATMs and branches.
  • An online bank with a limited number of physical locations.

Zoomers might be tech-savvy, but they still appreciate the ability to visit a banks’ physical branch. Nearly half of Gen Z individuals, or 43%, value the security and reassurance provided by traditional brick-and-mortar bank branches, as revealed in the Oliver Wyman Forum’s Global Consumer Sentiment (GCS) survey.

That’s why providing users with an omnichannel banking experience is or soon will be a key differentiator in the banking industry.

*To all non-Zoomers out there, this is a reference to Dua Lipa’s hit song Physical. If you didn’t catch that, you probably understand Gen Z less than you think. 😉

2. Social media education

Being born into the www, Zoomers are highly dependent on the Internet, especially social media, for advice and resources on financial products and banking services.

Sure, advertising your digital banking offering on TikTok will probably result in a big wave of Gen Z consumers, but narrowing down the impact of SoMe to mere ads would be a big understatement.

YouTube is the top social media platform that US Gen Z consumers (65.6% of all respondents) turn to for banking information, per Insider Intelligence’s survey. Then follow TikTok, Facebook, Instagram, Reddit, and X.

It’s especially interesting to compare the changing media habits of iGen and Millenials. While 43.8% of iGen looks for information about the banking industry on TikTok, only 24.1% of Gen Y do so. Millennials much more prefer to check financial products on Facebook (63.9%), unlike Gen Z (40.6%).

As stated in Lexis Nexis insight, Gen Z is eager to listen to “Finfluencers” (financial influencers) online who promise high returns on certain stocks. However, this led to a widespread prevalence of “get rich quick” scams among Gen Z. As a result, there’s a heightened sense of caution within this generation, making them particularly wary of enticing investment propositions.

How can you leverage it?

Gen Z is pragmatic; you may expect they will check your social media before trusting you with their customer data and money. So, it’s important you convey an authentic, professional, and cohesive message across all your social platforms.

Moreover, banking institutions should use YouTube to connect with young people as they start learning about finance to later convert them into customers of their financial services. They can partner with YouTubers to create videos that show different ways to invest, save money, and manage their funds.

3. Sustainability & financial inclusion

64% of Gen Z would switch banks if their current provider fell short on ethics and environmental sustainability, according to Insider Intelligence.

This suggests that Gen Z is more likely to prioritize environmental and social responsibility when choosing a bank. However, the sustainability concern isn’t limited to just choosing the right basic banking services provider; it extends to the investment sector, too. That’s why ESG investing might become the new trend among the generation.

ESG investing, also known as socially responsible investing (SRI) or sustainable investing, is an investment approach that considers environmental, social, and governance (ESG) factors alongside traditional financial metrics.

Gen Z is the generation of investors who are most likely to consider ESG factors in their investment decisions. According to a 2022 survey by Morgan Stanley, 90% of Gen Z investors said that ESG is important to them, and 85% said that they would be willing to sacrifice some of their returns to invest in companies that align with their values.

Gen Z’s embrace of ESG investing reflects their deep-rooted environmental and social consciousness, coupled with their skepticism of traditional financial institutions and their technological fluency.

4. Exceptional user experience

Gen Z has different UX needs than previous generations. They are more likely to use their smartphones to access banking services, so they need an app that is designed for mobile use.

They have high customer expectations, too: 48% of Gen-Zers would switch to a bank if it had a better user experience. That’s why UX design is the part of your mobile banking app development process you don’t want to miss.

Here are some specific UX needs of Gen Z:

  • Mobile-first design: The app should enable easy financial transactions on a smartphone.
  • Simple and intuitive interface: Easy to learn and use.
  • Personalized features: Users can personalize the user experience based on their individual needs and preferences.
  • Gamification: Use gamification to make it more engaging and fun to use.
  • Financial education tools: The app should provide financial education tools to help Gen Z learn about managing their money.

5. Investing options

I’ve already mentioned a few times how important investing is for Gen Z, but let’s examine the issue in more detail.

  • Gen Z is the most investing-savvy generation yet. According to a study by the CFA Institute, over half (56%) of the Zoomers surveyed own some investments. The financial transactions here mostly involve investing in cryptocurrency (55%) and stocks (41%). They are less likely to use mutual funds than older generations and more likely to invest in cryptocurrency and NFTs than Gen Xers.
  • Gen Z is investing early. More than four in five (82%) U.S. Gen Z investors began investing before they were 21.
  • Gen Z experiences 3 main barriers to investing. Most Gen Zs in the US who don’t invest say they don’t have enough savings (65%), don’t earn enough money (64%), or don’t know enough about investing (56%).

As you can see, Zoomers want to invest, and they do it. And if they don’t, in more than half of cases, that’s because they lack investing knowledge – which is a substantial market to address.

6. Personalization

It might seem personalization is nothing more than a buzzword at this point, but it’s not!

Research after research confirms personalization drives engagement and user retention, as users want easy navigation, tailored recommendations, and targeted promotions:

  • Over 7 out of 10 consumers expect businesses to provide personalized interactions. And nearly 4 out of 5 get frustrated when this doesn’t happen.
  • Personalization is a key driver of business growth. It can boost revenue by up to 40%.
  • 78% of consumers said that getting personalized messages made them more likely to buy from that brand again.

Gen Z is the first generation to be born into the digital age; they are accustomed to having personalized customer experience online. According to W1TTY’s research, 64% of Gen Z respondents said they are looking for a customized banking experience with product and service recommendations relevant to their unique situation.

Yet, that’s where many banks and neo banks still fall short with their “one-fit-all” solutions.

What zoomers want from the financial industry?

What will help you fulfill Gen Z’s customer needs?

To effectively meet the needs of Gen Z customers, financial institutions should prioritize agility, embrace emerging technologies, and foster a customer-centric culture.

With these components, you’ll be armed to adapt to changing preferences, provide personalized experiences, and build lasting relationships with this influential generation.

1. Agility

Agile means quickly identifying and responding to change (e.g., emerging trends), adapting business processes to changing consumer behavior, and continuously innovating to stay ahead of the competition.

In terms of Agile and banking technology, fintechs have the potential to outperform traditional banking organizations.


Traditional banks are often weighed down by their legacy systems. They are often outdated and expensive to maintain, making it harder for banks to keep up with the latest trends and innovate.

On the contrary, digital-native financial companies enjoy the speed and fintech innovation that lets them launch new features every one-week sprint instead of months.

That’s why, the solution to overcome this and other banking challenges might be adopting the fintech mindset.

2. Embracing new technologies

Agility alone won’t be enough to align with the future of banking. You need secure, scalable, adaptable, and highly intelligent banking technology to handle Gen Z needs.

Here, the solutions are artificial intelligence and cloud computing.

AI for Gen Z banking

It goes without saying the bank of the future is AI-first. This emerging technology finds many use cases in the banking industry, mainly in three areas: security, automation, and personalization.

  • Security: Merchants are predicted to lose over $206 billion to online payment fraud between 2021 and 2025. This highlights the urgent need for fintech companies to take measures to detect and combat it. One of them can be machine learning for fraud detection.
  • Automation: Over the past months, we’ve observed how generative AI has become an absolute game-changer in terms of automation. But the possibilities that come with artificial intelligence don’t end here. In banking, AI can be used in multiple ways, from using Optical Character Recognition (OCR) to scan documents to integrating AI chatbots in customer service.
  • Personalization: No wonder intelligent apps are a big AI trend: Gen Z is all about personalization. Probably the best way to achieve it is with ML-based recommender systems. They analyze user data, such as purchase history, browsing behavior, and demographic information, to identify patterns and predict users’ interests.
    In the banking sector for Gen Z, they could be used for:
    • Personalized product recommendations: AI can analyze customer data to identify potential cross-selling opportunities. For example, AI could recommend a foreign exchange account if a customer frequently makes international transfers.
    • Personalized financial advice: Artificial intelligence can help customers make informed financial decisions by giving custom advice on budgeting, saving, investing, and retirement planning.

The future is in cloud

McKinsey indicates intelligent cloud infrastructure as one of the key components to strengthen the core banking technology. 

As companies across various sectors embrace the cloud for a growing portion of their operations, evidence shows that cloud-based platforms offer the enhanced scalability and resilience essential for an AI-driven approach.

What’s more, cloud infrastructure reduces IT maintenance expenses and facilitates self-service models for development teams. This, in turn, fosters rapid innovation cycles through managed services that speed up environment setup from days to minutes.

Gen Z and the future of banking. Summary

Embedded finance, biometric authentication, reward points, or AI-powered personal advisors – although all important, solely following fintech trends or implementing fancy mobile banking app features won’t get you far. First and foremost, you need to understand your audience before reaching it. 

Gen Z has directly witnessed the digital transformation of the world. That’s why they have specific needs for the financial sector. I hope this article helped you understand them better.

Banking software development