New Survey Shows Banks Are Fumbling GenZ Relationships

New Survey Shows Banks Are Fumbling GenZ Relationships

Howard Schulman

Marketing Strategist and Operations Director at Lightico

Views 525

New Survey Shows Banks Are Fumbling GenZ Relationships

28.11.2019 10:15 am

There’s little dispute about the economic clout of Generation Z – The adults born after 1997 represent $44 billion in buying power. By 2020, they will make up 40 percent of U.S. consumers. One-quarter of the U.S. population belongs to this group, so it would seem that brands would scramble to court its members.

Banks are taking notice. The industry is stepping up its efforts to take full advantage of those impressive numbers.

But is it working? Lightico recently commissioned a survey of 1,000 Americans about how they interact with their bank, and their overall customer experience. The survey included a number of banks, including big players like JP Morgan Chase, Citibank, Wells Fargo and Bank of America.

This data reveals that this entrenched industry isn’t making their desired impact on Generation Z. That’s despite banking’s attempts to become more innovative to appeal to these digital natives.

That may seem like a disconnect, since digital transformation has been a goal of banks for many decades. But these initiatives just aren’t yet enough for the “always on” Generation Z demographic.

Digital and mobile platforms are critical banking systems that they must build in order to thrive with Generation Z. As the report shows, it is key for banks to start serving these new audiences through new channels to improve their customer experience.

Born Into Their Family’s Bank

Gen Z Family Banking

Banks probably know they already have a number of Generation Z clients. That’s for good reason. The Lightico survey found that this group tends to start off banking with a familiar brand. So the fact that a family member is already a client at a particular bank is key factor in their initial bank choice.

In other words, Generation Z is disproportionately reliant on what’s easy and recognizable through family connections. When it comes to their initial banking relationships, Generation Zers don’t do much shopping around. That comes later.

First Impressions: Not Digital Enough

Location and familiarity only go so far. As it turns out, Generation Z often do not have a good first impression of banks. Among their initial disappointments are that these institutions are not digital enough.

This demographic has never known life without technology. About 45 percent of teenagers — only a few years away from becoming full-fledged adults and banking clients — are online several times a day.

Mobile and online experiences are not just second nature — they are what’s expected from any interaction with a brand. From streaming services like Netflix to shopping outlets like Amazon, Generation Z are born linked with the online world.

But when it comes to their banking relationships, too much happens offline. Our survey showed that digital convenience often isn’t available to Generation Z, more than other age groups.

Specifically, during an online transaction:

  • 64 percent have been asked to print and sign paper forms. This is 2-3 times the rate of other age groups.
    Gen Z is asked to Print Survey results


  • 73 percent have been told to visit a physical branch.
    Bank survey result gen z banking


Of course, there are reasons banks want to see a client in person. There are rules and regulations, not to mention identity verification requirements which protect the client as much as the institution.

Nonetheless, these offline requirements are particularly burdensome for Generation Z. It does not contribute to making the banking experience enjoyable or convenient.

This has real implications for banks, who want to market their core products to this demographic.

Lightico found that the top frustrations among this group in applying for a credit card, new account or loan are having to physically go to a branch and the amount of paperwork. This data was further demonstrated by our student’s report on opening accounts and credit cards.

Those were cited by 75 and 73 percent of Generation Z respondents, respectively. Interestingly, these were much bigger frustrations than a slow online app, which was cited by only 43 percent of respondents.

gen z bank survey results on frustration

GenZ Won’t Bank “The Old Way”

It may seem counter-intuitive, but for those digital natives, a positive service experience is especially important. They may want to rely on apps and online platforms, but they also expect excellent customer service. The Lightico survey found that more than half of Generation Z respondents (51 percent) considered switching banks as a result of a bad service experience.

That’s a rate twice that of the other age groups. In other words, this is a group that expects to be treated well, and will look for alternatives if they are not.

GenZ Customer Experience expectations in banking

Gen Z Expects Digital, Mobile, Instant Banking

Generation Z seems to have no qualms about leaving their original bank. That’s true even if there is a family legacy with that brand. More important than the original draws of convenience and familiarity are the online and mobile experience.

82 percent of Generation Z respondents said they would switch financial institutions if the alternative offered them superior digital experiences.

Gen Z would switch banks

Banks Have A New Opportunity To Reach Generation Z

Generation Z is rightfully a main target of major industries. Their buying power and sheer size, especially in the coming years, is tough to ignore. Although banks see the coming influx of clients from this age group, they are not doing enough to keep them in the fold.

These customers arrive at banks largely because they have been led there by their parents. As they get deeper into the banking experience, they often find it’s not what they hoped. As a result, they are ready to leave to find better customer interactions elsewhere.

Specifically, Generation Z is looking for superior digital and mobile experiences. Those experiences should make it easy and pleasant to explore and purchase banking products. In every interaction with their bank, they want the process to go smoothly. That usually means it’s online and accessible at their fingertips.

GenZ expect simple, digital and mobile banking experiences. And, its clear that if they don’t get them, they will search elsewhere for their financial services.


This post originally appeared on


Latest blogs

n/a n/a

How COVID-19 Is Ushering In a New Era of Cashless Technology

  Image source:   Cashless technology isn't a completely fresh concept. People have been using credit cards for decades, and the market for fintech services has been Read more »

Jean Shin tyntec

Using WhatsApp for 2FA is the Future of Banking

From user authentication and password resets to transaction verification, two-factor authentication (2FA) offers basic but useful protection for consumers. The 2FA process typically sends an SMS sent to the customer with a one-time password (OTP). Read more »

Amir Ghodrati App Annie

The Role of Fintech Apps in Navigating This Period of Financial Insecurity

Economic instability has been ricocheting throughout the stock market in the wake of the global coronavirus pandemic. Its effects have been felt across all industries, with winners and losers’ across different sectors. So, how has fintech Read more »

n/a n/a

How to Choose a VPN for Digital Privacy & Security

In a world where almost everything is connected, and where hackers and other malicious people are roaming the internet, it is always advisable that you take every precaution that you can to enhance your data security and privacy protections. Using a Read more »

Ben Slater Instaclustr

The Case for Adopting Open Source – Own Rather Than Rent the Foundations of Your Business

For some time open source was seen as something that only the biggest companies could use and play with. But with the modern, increasingly fast business environment, the use cases for open source are in everything and the technology is increasingly Read more »

Related Blogs

Simon Wilson Icon Solutions

Strange New World: What Next for Banks?

What’s next for banks in this strange new world we find ourselves in? Forget the forecasts and predictions, we are in unchartered territory and the only honest answer is that no one truly knows exactly what is coming down the line. But what we do Read more »

Amit Dua SunTec Group

Intelligent systems can help banks maintain business continuity and reinforce customer trust in these uncertain times

With the inevitable tribulation and market regulations resulting from the pandemic, one thing is certain - the global banking landscape will face a lot more uncertainty. In the meantime, banks have been called on to help boost the economy – to Read more »

Andrew Stevens Quadient

Banks to Defer Mortgage Payments Following Coronavirus

It’s great to see RBS leading the charge in putting customers first during a crisis – with Lloyds and TSB quickly following suit. People are talking about these policies because banks have communicated them very clearly; if you put the leg work in Read more »

Dr Bimal Roy Bhanu Ai XPRT

Are you keeping up with the Regulator?

Not many things in life are certain, but in the financial services industry it’s obvious to all participants that regulators are continually tightening the national and international governance, risk and compliance requirements. The ultimate aim for Read more »

Andrew Stevens Quadient

Banks to Use Mobile Channels and Customer Data to Differentiate Themselves in 2020

Digitally native neo-banks will continue to differentiate themselves in the market in 2020 by the experience they offer to customers. As a result, these banks will begin to pick up the critical minimum number of customers to become profitable, Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel