Millennials and Gen Z — 85 banking stats you need to know

85 banking stats you need to know about millennials and Gen Z

It’s not all lollipops, rainbows, and branded credit cards, but it could be 🦄

Take a look at any major bank’s digital tools or GAFA’s alternative finance apps, and you’ll see a common undercurrent to all of them:

They’re banking on younger generations as the next wave of most lucrative customers (no pun intended…but actually 🤔)

It’s no secret that millennials and Gen Z have been a driving force behind most banks’ decisions to innovate. These customer segments have long been poised as the key to success for financial institutions, but they also largely remain a mystery to many banks and credit unions because of their unique spending habits and banking needs.

We’re not just looking for high-yield savings accounts and RRSPs—we want branded credit cards, better mobile banking apps, financial advice, and quicker services without those pesky 24-hour turnarounds. In other words, we younger banking customers live in the same-day-delivery era, and banks have to catch up.

Now, banks already know this, having long ago seen the huge potential these segments have, where their spend habits, loyalty to their banks, and their desire for more robust digital banking services have already and will continue to shape the way financial institutions innovate. So, in this article, we’re going to share 85 stats around millennial and Gen Z banking that will help inform your FI’s banking strategies in 2021 and beyond.

(Who’s taking bets on how many times I can use the word “banking”? 😅)

These stats will offer insight into how these segments prefer to bank, the types of banking services they’re looking for, and their loyalty to traditional banking. And, coming from a millennial (one who’s ditched skinny jeans, thank you very much) I can attest to these stats being on point 👋

Let’s dive right in.

KEY TAKEAWAYS

⚡️ 84% of Gen Z feel technology has a direct impact on how they approach financial management

⚡️ 57% of young banking customers report it’s incredibly important to them that their bank or credit union helps them improve their financial wellness

⚡️ 67% millennials and 90% of Gen Z are willing to turn to big tech and nonbanks for better banking tech and faster banking services

⚡️ 58% of millennials want their bank to offer them more personalized advice and solutions that help them succeed financially

⚡️ 83% of Gen Z and 78% of millennials are frustrated with traditional banking processes

Millennials, Gen Z, and money

• The COVID-19 pandemic caused more millennials and Gen Z to be concerned about financial management (53%)
• 40% of millennials and 37% of Gen Z are using peer-to-peer payments more frequently
• 21% of millennials and 17% of Gen Z are using buy-now-pay-later and installment payment plans
• 57% of Gen Z and 50% of millennials are increasingly relying on e-transfer banking services to pay bills and perform everyday banking transactions
• The average millennial carries approximately $4,700 in credit card debt, while Gen Z carries roughly $2,000 in credit card debt
• 76% of millennials believe they are unable to achieve their financial and personal goals because of debt
• 57% of Gen Z are unsure about their savings
• 41% of Gen Z are anxious about their finances or financial futures
• Yet, more than a quarter of Gen Zers don’t believe young adults need to worry about proactively saving money
• 56% of millennials live paycheck-to-paycheck
• To achieve their financial goals, 90% of millennials are willing to make lifestyle sacrifices (like giving up vacations or dining out)
• When it comes to financial literacy, 84% of Gen Zers rely on their family and friends for financial information and guidance
• 84% of Gen Z feel technology has a direct impact on how they approach financial management
• 50% of millennials and Gen Z have a ‘rainy day fund’ they regularly contribute to
• Millennials have an average saving rate of about 9.8%
• Only 24% of millennials are considered to be financially healthy
• 57% of young banking customers report it’s incredibly important to them that their bank or credit union helps them improve their financial wellness
• 59% of Gen Zers consider themselves to be financially independent and try to avoid debt at all costs
• Wells Fargo’s 2020 Annual Retirement Study found that 18% of millennials began saving more money, more frequently, due to the pandemic
• 64% of younger banking customers (such as Gen Z) regularly turn to social media platforms like YouTube and Instagram to learn about money
• Research from Oracle shows that younger generations of banking customers are far more anxious — and discerning — about their finances
• Both millennials and Gen Z make wages that are roughly 20% lower than what young adults were making 30 years ago

How millennials and Gen Z like to bank

• 44% of Gen Z rank debit cards as their preferred method of payment, followed closely by cash
• 50% of millennial and Gen Z consumers would open an account with a bank based on referrals from friends and family
• Where 65% of millennials will hold a checking account with their primary bank, that number drops to 56% for Gen Z
• 79% of millennial customers use online banking to open a deposit account
• Gen Z is already using mobile banking at 50% to 80% of the pace of millennials
• 71% of these younger customer segments would use entirely computer-generated banking services
• 93% of millennials prefer no-fees banking (and factor this into their decision when choosing a financial institution)
• 99% of Gen Z and 98% of millennials use a mobile banking app for many everyday banking tasks, such as viewing account balances, checking their credit scores, and depositing paychecks
• Gen Z in particular love in-branch banking, where this segment conducts their banking in-branch more than millennials and at four times the rate of baby boomers
• 58% of Gen Z prefer to open new accounts using mobile or desktop banking tools
• 1 in 3 Gen Z with a loan used an online lender, in contrast to the 1 in 5 millennials with a loan who used an online lender
• Younger generations like millennials opt for banks with better digital banking experiences, where 43% abandon mobile banking tools because of poor user experience
• Research is showing that 67% of millennials and 90% of Gen Z are willing to turn to big tech and nonbanks for better banking tech and faster banking services
• Both millennials and Gen Zers are more likely than older generations to be customers of more than one financial institution
• Yet, roughly 74% of millennials and 72% of Gen Z would prefer to use just one bank or credit union for all of their financial needs
• 29% of Gen Z use their primary FI’s mobile banking tools 2–6 times per week
• Nearly half of millennials count on banking tech and fintech to overhaul the way banks operate
• Many millennials are turning to branded credit cards (not those issued by their primary FI), where Deloitte found 80% of millennials use these cards
• Around 47% of Gen Zers and 46% of millennials would switch to a digitally-only bank
• Of all generations, millennials are the most likely to use both online and mobile banking channels
• 67% of millennials want better digital budgeting tools from their banks
• Some of the top frustrations millennials have with their banks include technology failure (33%), inconsistent experiences (23%), and the lack of a custom experience (16%)

What millennials and Gen Z are looking for from their banking

• 50% of millennials would be willing to make the switch to banking with Google or Amazon
• Millennials are 24% more likely to value financial education and guidance than Baby Boomers and Gen X
• 58% of millennials want their bank to offer them more personalized advice and solutions that help them succeed financially
• 67% of millennials and Gen Zers would share more data with their banks if it resulted in better benefits
• Meanwhile, 63% feel sharing data should inherently deliver more personalized banking products and service advice
• 77% of millennials would switch for a bank that offered both online and in-branch banking options (challenger banks)
• Research shows that over half of Gen Z banking customers use digital wallets and want more P2P options
• 63% of millennials and Gen Zers feel the banking tech enables them to have better oversight of their finances — making better digital banking experiences more imperative than ever
• 21% of millennials and Gen Z customers place more importance on experiential factors versus fees
• 42% of younger customers want their banks to provide them with timely insights and solutions as their needs arise
• 65% of millennials would be open to switching to a community bank if they offered better mobile banking solutions (like mobile check deposit)
• 75% of millennials would switch banks just for a better mobile banking experience
• Gen Zers are 25% more likely than other generations to provide their personal data in exchange for more predictive and personalized digital banking experiences
• 59% of young banking customers want real-time insights and adjustments based on their spending
• 49% of millennials want real-time and forward-focused insights based on spend analysis
• 78% of younger banking customers (like Gen Z) would like to receive financial advice from their FIs, but only 28% actually do

Loyalty and sentiment around financial institutions

• 48% of millennials have accounts with more than one financial institution — meaning their loyalty is hard-won but worth the effort in retaining it
• 47% of millennials use digital banking tools but are also the fastest segment to ditch these tools when they have poor user experiences
• Just 30% of millennial banking customers are actively engaged with their FI — making these customers more likely to switch to another bank or credit union than any other generation
• 65% is the average customer satisfaction score for millennials and their banks, compared to 88% for baby boomers and seniors
• 28% of Gen Z believe all banks are the same
• 27% of millennials have sought advice from banks, but ranked many top banks as a least-loved brand
• 19% of Gen Z customers are ready and willing to jump ship for another bank or credit union
• 71% of millennials would rather visit the dentist than listen to what their banks have to say about financial management
• 33% of younger banking customers don’t even believe they need a bank
• 48% of millennials have accounts with more than one financial institution
• 83% of millennials would readily switch banks if another offers better rewards
• When it comes to engaging with their banks, millennial customers have the lowest level of engagement (only 25% are fully engaged)
• And millennials are also 2.5x more likely to switch banks versus baby boomers and Gen Xers
• Gen Zers who hold one or more checking accounts are 2x more likely to hold these accounts at financial institutions they consider to be outside of their primary FI
• 41% of the time, customers think the products and services their banks offer them are offered only with the bank’s best interest in mind.
• 49% of tech-savvy, younger banking customers would stay loyal to their bank based on the quality of their service and customer care
• And 50% would stay loyal to a bank or credit union that provided them with educational, helpful content
• 65% is the average customer satisfaction score for millennials and their banks, compared to 88% for baby boomers and seniors
• 19% of Gen Z customers are ready and willing to jump ship for another bank or credit union
• 78% of millennials and 83% of Gen Z are frustrated with traditional banking processes
• Despite this, 64% of millennials would rather do anything than go through the hassle of switching banks
• 67% of millennials are concerned their PFI (personal financial information) can be easily hacked
• Only 5% of millennials feel their bank understands them financially
• 64% of Gen Zers would prefer to use traditional banking services over big tech based on trustworthiness (if the services were more robust)
• 25% of Gen Zers trust digital banking solutions (think: big tech) over traditional banks

Meet the author 👋

This article was written by Jacalyn Beales, a content pro with a background in scaling Canadian startups and SMBs. When she’s not writing, you can find her outdoors, or hunting down the best craft beer in her city.

P.s. if you found this article helpful, you’ll like our financial wellness guide. It’s free, and pretty darn insightful. Grab your free copy of our Financial Wellness guide here 👍