Why banks are failing to capture Gen Z’s attention

Ask any Gen Z about their relationship with their bank, and they might look at you blankly. What do you mean, a “relationship” with a bank? For much of the generation, a bank is just a place to store your money, not a place for real, actionable financial advice. Many turn to online money communities, personal finance influencers and apps for more realistic guidance. This phenomenon can’t be written off as “Gen Z preferences”, but must be taken seriously. It exposes the Achilles heel of traditional financial institutions: that they’re failing to speak the language of Gen Z.

I’m Gen Z and co-founder of a fintech, so I intrinsically understand how my generation engages with (or, more accurately, disengages from) banks and credit unions. For better or worse, Gen Z is a generation that expects speed and convenience in every aspect of life, and that applies to their financial institutions. If you’re not updating your processes, advice or user-facing materials, then you’re not capturing Gen Z’s attention.

There are a few key things to learn about Gen Z in order to really grasp their attention. Firstly, Gen Z is digital-first and short on attention, so it’s crucial that banks really appeal to them. If a form takes ten minutes to complete, the likelihood of Gen Zers completing the form is low - very low indeed.

Secondly, Gen Z has been and continues to grow up in a turbulent period - so they’re prone to ‘doomspending’, and spending money on the here and now. The housing market is out of control and climate anxiety is rife, so long-term planning isn’t necessarily the priority. While Gen Z still spends a lot on material possessions, experiences are equally important: so saving up for the backpacking trip of a lifetime might be more important than saving up to buy a car.

Thirdly, Gen Z has seen technology develop from embryonic ideas as they’ve grown up, and they’re now used to seamless apps. Clunky banking apps are a major turn-off, as Gen Z expects digital platforms to be intuitive, engaging, and easy to navigate. 

In the same vein, Gen Z doesn’t take kindly to jargon. Convoluted terms and paragraphs of small print about hidden fees will be ignored by Gen Z, and won’t set them up for financial success. You only have to look at Klarna - whose success is due in part to simple, easy-to-understand advertising - to acknowledge how clear your messaging has to be.

That’s not to say that Gen Z doesn’t care about finance: if anything, this generation is more determined to control their money because of the economic circumstances. Navigating a difficult job market for early careers and managing student debt is no mean feat, and paying record-high rent doesn’t make it easier to put money away for a rainy day. Ultimately, Gen Z wants tools that make money management simple, transparent, and even fun. At Frich, we’ve found that peer comparisons are a way to keep Gen Z accountable with money in a fun and interactive way; and our advice doesn’t feel outdated, because it’s coming from peers instead of a ‘stuffy’ bank.

So instead of confusing potential customers by talking about APR, tracker mortgages or credit scores, focus on the tangible. What realistic goals can you help Gen Z reach? Instead of patronising them, speak to them authentically, and figure out how you can help them survive in an economy where the cards are stacked against them.