Keeping Up with Gen Z: Banking in the Digital Age

Generation Z, also known as Gen Z, are making their mark on the banking industry. As the first truly digital native generation, they have shown a strong preference for digital banking channels and mobile apps. A recent study found that use of apps in Europe was twice as high as previous generations. More than 60 percent of Gen Zers value 100 percent digital banking services.

As the world pivots towards an economic future shaped by Gen Z, issuing banks are responding in kind. They are not just evolving; they’re revolutionising their card offerings to align with the tastes and tendencies of this cohort. Born into a digital era and speaking the language of instant access and progressive values, the banking needs for members of Gen Z are a call for innovation in debit, credit, loans, buy now pay later (BNPL) schemes, and prepaid services. For instance, the seamless integration with mobile wallets, such as Apple Pay, enables Gen Z to enjoy the convenience they value, facilitating effortless and secure transactions with just a tap on their smartphones. Banks have an opportunity to meet Gen Z’s digital banking preferences today and into the future, which is good for business.

The value of digital integration in driving an improved user experience

Understanding that Gen Z lives and breathes online, issuers are integrating their card services with digital lifestyles. From straightforward digital applications for cards to seamless in-app management tools, banks are crafting a cardholder experience that is entirely online, responsive, and mobile-optimised. Card features are embedded within social media platforms and Commerce checkout processes, ensuring that Gen Z can transact where they socialise and shop.

With invaluable data at their fingertips, banks are in a position to leverage analytics to personalise offers and enrich the user experience. As a result, Gen Z can now benefit from custom rewards programmes, more transparent interest rates, and card designs that resonate with their personal values and interests. Banks are increasingly focusing on the user experience (UX), ensuring they offer intuitive interfaces and instant customer support using chatbots or social media making interactions with the bank as user-friendly as possible.

Paving the way to meet the holistic expectations of Gen Z

Gen Z has shown a real passion for social issues and are guided in their purchases by businesses that reflect their values. In response, banks are aligning with the strong ethical compass of Gen Z by offering cards that demonstrate environmental and societal values. This might come in the form of eco-friendly card materials, collaboration with charities, or rewards for green purchasing. Issuers are also emphasising transparency in their marketing and operations, shedding light on fees, rates, and the bank's own corporate practices to meet this group’s demand for honesty and integrity.

Gen Z is redefining what borrowing looks like with a greater focus on budgeting and debt awareness. Following their lead, banks are diversifying their offerings to include flexible repayment terms and low-entry-cost products. From micro-loans to BNPL services that integrate with debit cards, banks are offering a range of borrowing options that cater to short-term financing preferences, all while educating young customers about responsible credit use.

A good example of how banks are addressing Gen Z concerns about debt can be found in prepaid cards, which are being tailored as a tool for budget management and controlled spending. These cards often come with budgeting apps, spending analyses, and alerts, empowering younger users with information to make informed financial decisions. It provides a stepping-stone to more significant financial products and responsibility, in line with the Gen Z preference for gradual, controlled financial autonomy.

Adapting to tomorrow's customers today

Issuing banks are not only observing Gen Z preferences; they're adapting to them, creating a narrative in banking that aligns with this generation’s digital fluency, need for personalisation, ethical standards, and flexible, responsible borrowing. Banks that continue to innovate and align with these values will not only future-proof their offerings, but also engage a generation eager to embrace banking that understands and respects their unique outlook on life and money.