White paper: how millennials & gen Z can power growth for financial institutions
For a long time, digital-first customers represented the “young” people who would be the future of the bank or credit union. Today, that is no longer the case. Millennials (25-39 years old) and adult Gen Z-ers (18-24) represent over $3 trillion in spend.
Not only are digital-first offerings being demanded by older generations, but the younger generations are well poised to be a profit center for today’s issuers. Millennials are more likely than any other generation to have multiple products with their financial institution and represent over 25% of the US population. In addition to their spend power today, Millennials and Gen Z-ers are expected to inherit $30 trillion of wealth in the coming decade.
These generations are more fickle and demand more from financial institutions than their parents and grandparents. They expect immediate gratification and have high standards for digital apps. Opening an account in-app simply and easily is the first step to pleasing them – 43% of millennials report abandoning a mobile banking app because the process was too cumbersome.
This digital-first crowd is also more likely to switch to another financial institution – or big tech for banking – should a better option become available. Millennials alone are 2.5 times more likely to swap financial institutions than Baby Boomers.
Gen Z-ers are redefining what payments look like. 50% of them use a digital wallet and over 75% of adult Gen Z-ers use other digital payment apps. Both generations, as well as many in older cohorts, now expect highly engaging digital experiences. The opportunity in digital banking is vast and the risk for not innovating is high. No longer is digital transformation a nice-to-have – it is now a must have to attract and retain cardholders of all ages.
