How millennials and Gen Z are changing banking


Over the past few decades, there have been some major changes in the banking industry as the world moves into the digital sphere. Consumer demands and rapid technological advances have led financial institutions to adopt new practices to stay relevant and provide a more user-friendly experience for their consumers.

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Today, financial institutions no longer need “bricks and mortar” buildings, and contactless payment options are used regularly. Gone are the days of writing a few checks a week as digital features like cryptocurrency trading are gaining ground.

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While almost every generation advocates applying the latest technology or business practices, millennials and Generation Z are driving major change. According to a recent survey by GOBankingRates, nearly 30% of Americans ages 25-34 bank online, a higher percentage than any other age group, and banking is transitioning from physical to virtual much more flexible.

Let’s take a closer look at the survey results to see how Gen Z and millennials are changing the way US banks do business.

Generation Z and millennials are banking online

It probably comes as no surprise that Americans who have grown up in the digital age are choosing to bank online. According to our survey results, 21% of Americans bank online, which includes 20% of people ages 18-24 and 30% of people ages 25-34.

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Americans 65 and older seem less comfortable with the digital sphere: 81% do not bank with an online financial institution.

Gen Zers and millennials are moving to online platforms to do their banking in order to find better rates.

“For many Gen Z and millennials, the goal is to find a bank with the best benefits, not the best building,” said Jay Zigmont, Ph.D., CFP and founder of Childfree Wealth. “Online banks tend to offer better technology and often better rates. For example, if you compare local savings rates to high-yield savings accounts, it’s not even a competition. Now there are even services, like MaxMyInterest, that will move money from a HYSA [high-yield savings account] to another depending on current rates (and to remain under FDIC guidelines).”

They are also using mobile banking apps

With these generations used to doing most of their daily tasks through mobile apps, it’s probably no surprise that they’re also using these platforms for financial management. Our survey showed that 66% of Americans 18-24 and 68% of the 25-34 age group use mobile apps for their banking needs.

These are also the groups least likely to bank in person. While 42% of Americans ages 55-64 prefer to bank in person, only 14% of ages 18-34 do.

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Gen Z and Millennials don’t need their banks nearby

Gen Zers and millennials don’t take their checks to the bank or go in person to open new savings accounts; instead, they are cashing checks online and setting up savings accounts with a few clicks on bank websites.

When we asked Americans which feature or benefit is most important to them when opening an account at a new institution, we found that Gen Z and millennials care less about having their banks nearby (only 8-10% they value the location more). They are more interested in low fees, good fees, and signup bonuses.

The younger generations are not afraid of the ‘Challenger Banks’

Neobanks are sometimes called “challenger banks” and are part of an app-only banking system that is not connected to other branches like traditional financial institutions are. Neobanks are typically owned by fintech firms that offer other financial software, such as checking and savings accounts. Some popular neobanks include Current, Upgrade, Chime, and Dave.

While neobanks are not yet a widely used banking option among Gen Z and millennials, these generations are considering using app-only platforms more than any other. Some 53% of Americans 18-24 and 49% of 25-34 considered neo-banking last year. About 56% of older millennials (late 30s, early 40s) also considered this type of banking.

They don’t mind having several banks

Members of Generation Z and millennials are more likely than any other generation to work multiple jobs, constantly hopping between the real world and the virtual world. Therefore, an extra level of juggling is almost expected for these generations, and having accounts at multiple banks is nothing out of the ordinary for these groups.

Our survey showed that 54% of Americans ages 18-24 and 58% ages 25-34 are willing to have different types of accounts at multiple banks. Additionally, 62% of 35-44 year olds in the older Millennials and younger Gen X category are willing to balance money across multiple banks.

Those over 65 are not as willing to place money in more than one bank. Only 42% said they would.

They are not using money market accounts or certificates of deposit

Certificates of deposit (CDs) and money market accounts are probably accounts Gen Z have never heard of and millennials rarely use. A CD is a fixed-time deposit that has a fixed interest rate. A money market account is a deposit account that pays interest based on interest rates in today’s economy.

The survey revealed that just 7% of Americans ages 18-24 and 12% ages 25-34 currently have money market accounts. When looking at Americans 65 and older, on the other hand, 20% have money market accounts. The generation gap for CDs is similar, with less than 10% of Gen Z and millennials investing and 16% of people of retirement age using them.

They ain’t writing checks

With apps like Venmo and PayPal making peer-to-peer money exchanges as easy as ever, the need to write checks is diminishing significantly. The GOBankingRate survey revealed that 43% of Gen Zers and 50% of millennials have not written checks in the past year.

While some Americans age 55 and older still write a few checks a month, the need for checkbooks and paper money has diminished significantly in today’s digital world.

They are relying on the cryptographic capabilities of banks

The younger generations are also more confident when it comes to the crypto capabilities of banks. According to our survey, it was very important to millennials and Gen Z that their banks be affiliated with crypto platforms.

While only 6% of Americans 65 and older considered it essential that their bank be affiliated with cryptocurrency, more than a quarter of Gen Z and millennials thought it was at least somewhat important: about 10% of the Generation Z thought it was very important and 16% of millennials thought it was very important.

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