Edin Deljkic is founder and CEO of Klika.
1997 birthed a new generation. Gen-Z, a.k.a. Zoomers, are burdened by the world they’re growing up in, but they’re meeting it with resilience worthy of everyone’s appreciation.
Gen-Z values experience over product, demands more transparency and expects an ethical approach to different aspects of life. Leading social change and promoting inclusivity, it just might be the generation that saves the world.
This approach also defines Gen-Z’s different spending and saving habits, which are now influencing the way financial institutions conduct their business. This means Gen-Z is free from the chains of traditional banking norms.
What does it mean for today’s banking?
Gen-Z’s Relationship With Traditional Banks
Gen-Z’s level of skepticism toward financial institutions is relatively high compared to that of earlier generations. Baby Boomers and Gen-X are the most loyal generations to a single financial institution. Banking was often labeled a long-term relationship, with bank representatives seen as wise advisors. Gen-Z disrupts the whole scene, tending to question the goodwill of financial entities.
This skepticism is fueled by two different aspects of Gen-Z’s worldview. The first one is ideological. Having grown in the aftermath of the 2008 financial crisis, Gen-Z is always interested in transparency and ethical business practices.
The other aspect is purely technological; digital natives have little patience for outdated experiences, such as an “app or website [that is]
difficult to navigate.” The generation that insists on remote work won’t prioritize walking to the bank over digital wallets (unless walking to the bank is a way to reach a daily goal in a fitness app).
Setting The Stage For Neobanks And Fintech
This digital-first approach to life gave rise to neobanks. Digital-only banks are capitalizing on Gen-Z’s preference for accessibility. There are many ways famous neobanks are paying attention to Gen-Z’s wishes, which are often good enough to be accepted by Millennials and Baby Boomers, too.
Some of these include app-based interfaces and low or no fees. User-friendliness starts with solid, traditional value—more bang for the buck—but retaining Gen-Z customers comes down to features and presentation. UX/UI design needs to be impeccable and understandable from the start. Although I don’t belong to Gen-Z, through various conversations, I’ve discovered that I was annoyed by the same issues Gen-Zers were, too.
If the interface isn’t easy to navigate, integration with other digital devices isn’t seamless and spending notifications aren’t instant, we will all be annoyed and look for neobanks that can deliver faster.
This doesn’t mean traditional banks are obsolete. Quite the contrary, a good transition to digital can help banks acquire new clients (like Gen-Z) and bring the powers of technology into the hands of their older generations of clients.
If properly introduced, features like AI chatbots and advisors can certainly help fluidify processes. However, additional attention is needed wherever technology is present: For more complex banking, talking directly to a banking professional seems more than welcome—and that is the power of traditional banking.
The Role Of Personalization
Older generations loved mixtapes and getting recommendations from the local Blockbuster. That way of connecting still exists, but in an evolved form—through algorithm-powered Spotify playlists and Netflix recommendation funnels.
Personalization doesn’t avoid the banking world, either. AI can easily power this personalization. Today’s AI tools can analyze spending habits and budgets to create suggestions for savings and micro-investing. Gen-Z is the generation that started investing earlier than other generations (at 19) for a reason: It’s a form of risk mitigation, allowing them better control over their finances.
Predictive analytics in banking apps are like a personal financial advisor. Banks must make these tools’ outputs feel relevant and valuable rather than invasive or critical of their clients’ habits.
Modern concepts are also highly appreciated. Using peer-to-peer payment options like Venmo isn’t only about sharing costs or small payments to friends; services like Venmo cater to the need for community and taking (financial) responsibility, which are ideas and values Gen-Z appreciates highly (and their parents, too). “Sociable” payments reverberated to social media, too, with trends such as loud budgeting.
The same can be said about every popular BNPL (Buy Now, Pay Later) service, which allows Gen-Z to enjoy different services and items without financial strain. Getting an awesome birthday present for Mom never seemed so easy.
Security And Privacy: Under The Hood Non-Negotiables
Gen-Z is acutely aware of cybersecurity risks yet accepts new financial solutions. Therefore, fintech, neobanks and startups must ensure technological security for all clients.
What was once a nice-to-have, such as biometric authentication, two-factor verification and fraud alerts, has moved into the “must-have” category.
Severe data breaches, such as those that affected LoanDepot and Evolve Bank & Trust in 2024, are one reason Gen-Z wants to have as much control over their data as legally and ethically possible. This means granular privacy control integration, allowing clients to know how banks share and use their data.
Since this approach is not only reserved for Gen-Z clients, it means this generation is helping to fix the whole banking sector by empowering users of all ages.
The Future Of Banking For Gen-Z
It seems like Gen-Z is the generation that runs the world these days. The youngest members are about to start their high school education, and Gen-Z “elders” (those born in 1997) are driving the global workforce now. With their vocal approach, Gen-Z’s influence accelerates a banking transformation that will benefit all customers.
Financial institutions must acknowledge Gen-Z and their influence to stay relevant. Innovation must intersect with trust, while technology must serve users’ needs in the world of tomorrow.
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