What Generation Z Wants From Their Bank

There are 69 million consumers in the U.S. who are between the ages of 12 and 27. They are described as the first digitally-native generation — a generation that has lived with mobile phones and apps for most of their lives. The iPhone was introduced 17 years ago when the oldest of this cohort, known as Gen Z, were in the fourth grade.

By 2030, barely five years from now, Gen Z will represent a third of the workforce. Their disposable income is projected to increase by sevenfold and their spending by sixfold as their incomes rise and they begin to benefit from the $90 trillion transfer of wealth headed their way from parents and grandparents.

By 2030, Gen Z will represent a third of the workforce.

For that reason, Gen Z is the generation that all businesses are courting — they are their future workers, customers, business partners and investors. What makes this generation tick is the subject of intense scrutiny because decisions made now could stick for decades to come.

Especially when it comes to how and where they bank and how and where they spend their money.

Generation Mobile

I had the chance to present the results of new PYMNTS Intelligence research on this topic with those attending the PSCU Member Forum in San Antonio last week.

What Gen Zs want from their bank was one of several research outcomes from a path-breaking study of credit union members, credit union executives and FinTechs done with the support of PSCU.

The research objective was to examine the innovation required of credit unions to meet the needs of their members today — and to attract and retain the future generation of customers over the next five to six years. The research outcome provides a blueprint for Credit Union 2030 — and an index to measure the innovation readiness of credit unions to deliver member-driven outcomes over that period.

The study considered more than fifty products and services, along with financial metrics from the credit unions studied. It analyzed current member use and future expectations for current and future credit union product offerings. The study also examined the ROI of investments in innovation to identify top, middle and bottom performers. More than 4,500 consumers were studied, both credit union and non-credit union accountholders.

The PYMNTS Intelligence/PCSCU study generated more than one million data points and, for me, one important conclusion.

What Gen Z wants from a bank is what almost everyone now wants from their bank: personalized products and services that are easier to consume on their mobile devices.

But for Gen Z, many features aren’t just nice to have. They are a requirement.

But for Gen Z, using their phones to open accounts, pay bills, send money to family and friends, get financial advice, apply for credit including BNPL, invest and save money — aren’t just nice to have. They are a requirement. Their low bar: those products and services must be available on the phone, on demand, and without having to bounce between apps and screens to access them

Gen Z wants this easy and seamless access to banking and payments services because they are active consumers of banking and payments products — five on average, according to the research. And they’d use twice as many, if offered and available.

So, therein lies the rub.

Gen Z is more willing and able to switch banking relationships to get the banking services they want — and they do: two to three times more often than their parents, and four times more often than their grandparents.

Generation Bank Switcher

PYMNTS Intelligence research finds that 42% of Gen Zs who bank with credit unions have changed their banking relationship over the last 12 months, as have 44% of Gen Zs that bank with traditional financial institutions.

Sixty percent of those switchers have kept their prior account open but no longer use it as their primary banking relationship — it’s no longer top of mind and/or top of wallet. Forty percent have closed their account completely. Fewer than 5% of these bank switchers came from FinTechs or neobanks.

Gen Z says they switch to get products and features that are highly mobile-centric. It’s not consistently what credit unions offer — or even say they plan to in the next three years.

Gen Z wants P2P from their bank or credit union, yet 41% of credit unions don’t plan to offer a solution that delivers a Venmo-like experience. (BTW, big banks don’t either.)

They would like to invest in crypto, yet 95% of credit unions don’t have anything like the Robinhood, Venmo/PayPal crypto investment option on their roadmap.

These innovation gaps can be costly, even though 95% of credit unions say banking Gen Z is a high priority.


The pre-college teen Gen Z cohorts want debit cards and apps that suit their needs, yet 85% of credit unions say don’t plan to offer something like the Greenlight experience.

Forty-two percent of credit unions say that they don’t plan to offer instant issue cards, even though this generation lives on their phones and wants to use them to pay everywhere. Many don’t even carry a physical wallet, so virtual is the mode of payment product they want and use.

Of top-performing credit unions, 40% say they have no plans to offer a BNPL product, even though it’s regarded as an important budgetary tool for Gen Z consumers. That’s, sadly, the same share as the bottom performers.

These innovation gaps can be costly, even though 95% of credit unions say serving Gen Z is a high priority.

Not only have Gen Zs switched their primary banking relationships in the last year, they are also 2.5 times more likely to leave their current financial institution if these services are unavailable. Or delivered with an experience that has too much friction associated with it.

There is a silver lining.

Gen Zs say they’d rather get services like BNPL and financial advice from their banks and credit unions.

So there’s a chance for banks and credit unions to deliver a personalized set of products from the financial institution that also bank their parents, but are delivered in a way that is best suited to their mobile financial lifestyle.

With trust, safety and security as the common cornerstones of that relationship.

Not Your Father’s Bank

In 1988, Oldsmobile launched an ad campaign that would ultimately destroy the 106-year old car brand.

“Not your Father’s Oldsmobile” was a tagline promoting a new “generation” of Olds(mobile) models designed with a much younger buyer profile in mind. GM created the campaign to overcome the brand’s reputation as the safe and reliable car driven largely by Dads and Granddads. I can relate. As a kid, there was always an Olds sitting in front of the house.

The campaign’s objective was to persuade young drivers to give Oldsmobile a serious look. The television and print campaign featured famous parents in the passenger seats of new Oldsmobile car models driven by their younger kids. William Shatner, Ringo Starr, Leonard Nimoy and Rod Sterling were among those famous parents. Space-age themes were the ad’s cornerstone. If you have thirty seconds, it’s worth checking out the William and Melanie Shatner ad.

These cringeworthy ads backfired. It is reported that Oldsmobile sales between 1986 and 1991 fell by 50% and by another 50% at the end of the 1990’s. Oldsmobile buyers might have been older, but they didn’t like being stereotyped that way, as old and stodgy. Younger buyers didn’t want to be seen as driving the same car brand as Dad — and worse yet, getting his stamp of approval — even if those new models looked different and came with spiffy 1990-s vintage bells and whistles.

Oldsmobile was sunset as a brand twenty years ago on April 29, 2004.

The one thing that lived on was its tagline.

Not your father’s [fill in the blank] became shorthand for describing the distinct differences between modern products and services and those which older generations may have considered their go-to.

Including banking.

Younger buyers didn’t want to be seen as driving the same car brand as Dad — and worse yet, getting his stamp of approval.


“Not your father’s bank/banker” has been used since the mid 2000’s to signal that the addition of online banking, credit and wealth management and investment services was an important upgrade to traditional banking customs and norms — even though not much else had really changed.

Today, it’s implicitly the value proposition of FinTechs whose slick mobile apps and easy onboarding appeal to many Gen Z and Young Millennials who view Dad’s bank as too old-school for their modern mobile ways.

Many Gen Zs find that the digital ease, simplicity and relevance of the banking products and services offered by FinTechs check their box. And work for many of their parents, who’d rather open a Greenlight account in their name for their 14-year-old than do the same thing at their bank. It’s easier to open, manage and monitor the spending and savings of their kids. Links to investment apps make it easy for their kids to learn about investing and open new conversations between parents and their kids about the impact of current events on stock and market performance.

But the shift to digital and more modern ways of engaging with people and businesses today crosses generational lines. Serving Gen Z well means delivering products and services to a mobile-centric consumer whose expectations for a seamless banking experience span generations — but whose requirements of those products and features vary based on lifestyle and lifecycle.

The smartphone has become the great financial services equalizer.

The shift to digital and more modern ways of engaging with people and businesses today crosses generational lines.

For every Generation Z consumer, there’s a parent or grandparent Venmoing them money, texting, and Face Timing with them, probably paying some of their bills online and ordering stuff online they may need.

Meeting the needs of Gen Z makes it a common denominator for all banks, and the call to action for how all banks adapt the banking experience to an entire generation of banking consumer that expects a better and more personalized digital experience. For Gen Zs — but also for everyone who lives life in a mobile, digital first world. And who values the safety, security, soundness and depth of services provided by a traditional financial institution.

Just don’t say this isn’t your father’s bank.