Gen Zers are slowly leaving big banks for their competitors

The trend: A new Javelin Research & Strategy report shows that between 2022 and 2024, the number of Gen Zers that said they banked with one of the five largest US banks dropped from 68% to 61%. 

Understanding what’s driving this attrition can help financial institutions (FIs) make a stronger case to attract and retain young consumers.

What’s behind the change? A few different factors may be at play:

• Many young consumers start off with their parents’ FI. However, they may shift to other FIs when they go to college and establish themselves outside of their parents’ home.
• And when they do, they may gravitate toward the most robust digital options available. Previously we’ve covered Gen Zers’ interest in fintechs’ apps, as well as their preference for aggregated views of their financial health within these apps.
• Gen Zers also want guidance. Banking providers that offer financial fitness tools could counteract the money dysmorphia and financial stressors that heavily impact this generation.

The marketing aspect: An FI can offer all of these features and still fail to attract and retain young consumers if it doesn’t highlight their availability in marketing campaigns. 

• A recent EMARKETER survey found the most common ways Gen Zers research banking products when deciding whether to use them are by reading product reviews (57.6%), and reading bank content (57.6%). 
• These methods are followed closely by engaging in online communities on Reddit and Facebook and other similar platforms (51.5%), and viewing influencer content (42.4%).

Many of these channels offer cost-effective ways of reaching Gen Zers—including finfluencer partnerships—affordable even for smaller FIs, depending on the scale they’re trying to achieve. 

Key takeaways: New financial product rollouts should always occur through marketing campaigns targeted to the most relevant audiences.

• These campaigns should prominently feature any mobile app, tools, or digital experience advancements that will help Gen Zers understand and improve their financial standing.