This is the final article in our four-part series exploring what different generations—Baby Boomers, Gen X, Millennials and Gen Z—want from their banking experience, and how community financial institutions can engage them.

Born between 1997 and 2009 (ages 16-28), Gen Z has never known a world without the Internet. Many received their first smartphones before age 11 and grew up navigating an endless array of apps and payment options. That digital-native background shapes nearly every aspect of their lives, from how they learn and where they get their news to how they make and manage their money.

Growing up through the Great Recession, a global pandemic and surging inflation has left many Gen Zers feeling uneasy about their financial futures. Nearly three-quarters say they face unique challenges other generations haven’t, and more than 40% have no emergency savings. However, 92% are actively trying to improve their financial literacy.

This generation values transparency, flexibility and tools that put them in control. They’re likely to have accounts at multiple financial institutions, so the competition for top-of-wallet and primary status is fierce. To win them over, community banks and credit unions need to connect with them through personalized, seamless digital experiences, offers and messages.

Early Banking Experiences

For much of Gen Z, banking began on a screen, not at a branch. As the first generation to grow up with smartphones, most view money as fully digital. They’re more familiar with mobile payments and digital wallets than paper checks or cash (and may even see cash as “cringe”). This generation’s first lessons in finance often came from watching short clips from influencers rather than at school or a traditional bank. Unsurprisingly, they expect every transaction to be fast and digital. Apiture research shows that 79% of Gen Z use a large national bank as their primary financial institution, with only 2% choosing a community bank and 11% choosing a credit union. It’s an uphill battle, but understanding this generation can offer powerful insights for turning the tide.

Banking Preferences and Expectations

Gen Z’s financial expectations are shaped mainly by early, constant access to technology and the Internet. They want digital experiences that are transparent and personalized. According to research by Gen Z expert Jason Dorsey, their top goals include saving money (70%), earning money (64%), budgeting (40%), paying off debt (34%) and investing (32%).

Some top priorities in banking for Gen Z include:

• Security: To Gen Z, data breaches and AI-driven scams are simply part of living in a digital world, but they expect strong fraud protection and fast resolutions as a result. 60% say top-notch security is one of the most important banking features.
• Digital Banking: 53% of Gen Z say robust digital tools are another deciding factor when choosing a financial institution.
• Personalization: Gen Zers want useful and supportive recommendations in their app, such as customized budget nudges, savings insights and spending breakdowns.
• Transparency: Open, honest communication is expected, from how fees are calculated to how their data is used.

Like Millennials, Gen Zers appreciate perks with value: cashback, discounts and rewards rank among their most-desired banking features. Gamifying banking experiences can keep Gen Z coming back, but their loyalty is often shallow. If a brand doesn’t engage them or meet their expectations, they’ll move on quickly.

Digital Habits and Channel Usage

Gen Z’s financial lives often revolve around their phones. Nearly all daily money management, from transfers to bill payment to credit score tracking, happens through mobile apps. Research by Apiture shows that Gen Z and Millennials use features like peer-to-peer (P2P) payments, credit score monitoring and expense tracking much more often than older generations.

Like Millennials, mobile apps are by far the preferred banking method (74%) for Gen Zers, followed by online via computer (11%), in-branch (10%) and by phone call (4%). Interestingly, 40% of Gen Z visit their local branch one or more times a month, signaling the universal importance of in-person expertise.

The most popular mobile banking features used by Gen Z are for: paying bills (68%), transferring money between their accounts (59%), transferring money to friends or family (54%), tracking spending (53%), depositing checks (50%) and managing credit cards (50%).

Gen Zers are also the generation most likely to pay off their credit cards each month, with 56% reporting they do so. However, because they often maintain accounts across multiple institutions, they are more prone to losing track of their financial products and services.

Loyalty & Engagement

Gen Z’s loyalty is still up for grabs, but it will take constant effort to retain it. They’re willing to switch financial institutions to get the services and personalization they want. Research from PYMNTS shows that Gen Z switches two to three times more often than their parents, and four times more than their grandparents.

Their top resource for financial advice is their parents (48%). One-third seek advice online, followed closely by financial professionals, friends and social media. Platforms like TikTok, YouTube and Instagram that offer bite-sized videos resonate with this younger generation.

To engage and retain Gen Z, financial institutions need to meet them where they already are: on their smartphones, on social media and in personalized digital spaces. Gamified learning, financial wellness tools and authentic, values-driven messaging can help build the trust and loyalty needed to keep them engaged and coming back.

Opportunities to Connect with and Engage Gen Z

The peak of Gen Z will turn 21 in the next two years and be able to apply for credit. Now is the ideal time for financial institutions to revamp their offerings and ensure they reach the newest banking generation with effective, personalized messaging.

To connect with Gen Zers, community banks and credit unions can:

• Put Trust and Transparency First: Highlight your security, fraud protection and ethical practices to show them you’re a brand that can be trusted. Offering fair and responsible services, like dynamic-limit overdraft protection, demonstrates you’re working in their best interests.
• Deliver Bite-Sized Financial Education: Many Gen Zers want help managing money, but traditional approaches to education often fall flat. Instead, take advantage of short-form video, gamified lessons and personalized insights that engage and reward.
• Provide a Seamless Experience: Gen Z expects fast, flawless mobile experiences for everything, including banking. Ensure apps are intuitive and visually appealing, and prioritize the tools they use most: P2P payments, budgeting and instant transfers.
• Simplify Account Opening: Make onboarding instant and friction-free, from account setup and ID verification to mobile funding.
• Keep Communicating: Gen Z is bombarded with offers from other financial institutions, so once you have a Gen Z account, engage them with targeted messaging continuously to keep them loyal.

Takeaways

Gen Z is shaping the future of banking with their mobile-first mindset and high expectations for digital banking. By 2030, their spending will represent 18.7% of total global spend—so now is the time for community banks and credit unions to start building relationships by:

• Delivering safe seamless digital experiences that make every transaction fast, intuitive and secure.
• Using data intelligence to tailor recommendations, alerts and offers to account holders.
• Providing financial education regularly through short, engaging content that is easy to understand and apply.
• Supporting their flexible income with consumer liquidity products that help with cash flow.

Knowing Gen Zers and what they want from their banking experience can help you adapt your overall strategy and win them over from the start.

Want more on how to cultivate lasting relationships across generations? Download our white paper,  Winning the Battle for Deposits.

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