5 Key Demographic Trends for Bank Marketers to Watch in 2025
As millennials and Gen Z enter their prime earning years, building early connections can establish banks and credit unions as trusted partners for their evolving financial needs — from investing to saving and beyond. Here are the key demographic trends financial institutions should keep on their radar.
By Caroline Hroncich, Contributor at The Financial Brand
As we step into the new year, demographic trends long on bankers’ radar are set to accelerate, reshaping the financial landscape. From a monumental generational wealth transfer to renewed interest in in-person banking, here’s what experts say marketers at financial institutions need to know to stay ahead in 2025.
‘The Great Wealth Transfer’ Remains Top of Mind
Younger men and women are poised to become significantly wealthier. Over the next two decades, an estimated $80 trillion will transfer between generations as older individuals pass down wealth to their heirs. Millennial and Generation Z women are expected to reap substantial benefits from this shift.
Wealth transfer remains a top priority for bankers, who are keen to attract millennial and Gen Z customers poised to inherit significant wealth. For marketers, this means developing a better understanding of these younger customers and their needs.
"Women in the workforce today are making more of the financial decisions. I think that’s going to be an evolution as we go forward," says Amanda Swanson, senior director in the Delivery Channels practice at Cornerstone Advisors. "As financial marketers, we have to make sure that we resonate with women when we navigate and communicate."
Wealth transfer is a gradual process, making it crucial for banks to develop strategies that not only retain their older customers but also build lasting relationships with their heirs, says Charles Potts, executive vice president and chief innovation officer of the Independent Community Bankers of America (ICBA). This becomes increasingly important as baby boomers age and rely more on the support of their millennial and Gen Z children.
"The key to better serving the aging population is to get involved with their heirs and or caretakers earlier," Potts says. "What you’re seeing banks invest in and investigate is how do we provide services that put some parameters and protections around it that engage the family members earlier before it becomes critical."
Younger Generations Continue to Demand More From Brands
Younger generations like Gen Zers and millennials are much choosier when it comes to the brands they want to spend their money on — especially when it comes to digital experiences. Gen Zers, in particular, are tough customers when it comes to selecting a banking technology — 83% of Gen Zers say they have been frustrated by a bank process, according to a Publicis Sapient report.
Younger generations expect their banks to be user friendly, intuitive, and curate things in a way that personalizes the experience for them, says Hashim Toussaint, general manager, Digital and Open Banking FIS. If a digital experience frustrates them, they won’t hesitate to take their business elsewhere. Peer-to-peer payment tools like Venmo and CashApp have set the standard for younger individuals, who now expect more user-friendly experiences.
"When I think about some of the younger generations, Gen Z, Gen Y, they expect their banks to function as intuitively as everything else in their lives, from streaming music to ordering food," Toussaint says. "I think the previous generations are a bit more forgiving, they know the world before digital and the world after. They’re much more willing to tolerate some experiences that might not be truly optimized."
Younger generations are also paying attention to economic, social, and governance (ESG) policies at banks and other businesses, Swanson says. Banks that are looking to capture more of the Gen Z or millennial market may want to highlight how they are serving the community.
"For banks, really going after that emotional connection for Gen Z is going to be critical," Swanson says. "Because a lot of the younger generations, millennials and Gen Zers, want to be a part of a movement. They want just to be part of, not just a big conglomerate, but a business that is improving the world today. So you have to think about how that emotional connection comes in from a demographic and marketing perspective."
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In-Person Banking May Make a Comeback
Don’t call it a comeback just yet, but experts are seeing a rise in consumer preference for in-person banking — or at least the option for it. This is prevalent across all generations, especially as tools like generative AI are expected to transform customer service. The in-person connection, whether it be in the branch or on the phone, is what makes a difference for some customers.
Banks are already reacting to this shift. In early 2024, Chase, for example, announced a plan to make a multi-billion dollar investment in opening 500 new branches and hiring 3,500 new employees by 2027. In November, PNC announced a $500 million investment to open 100 new branches and renovate 200 more.
Even younger generations, Swanson says, are interested in having a way to connect with an actual person when they are doing their banking. While customers may not visit branches to open accounts, they prefer person-to-person communication for education and financial support.
"They want to have that financial consultant, and they look at a banker in regards to that education," Swanson says.
Young People Still People Can’t Afford to Buy Homes
As housing and rent prices soar, buying a home at a younger age is becoming increasingly rare. The median age of first-time homebuyers in the United States reached an all-time high of 38, according to a report from the National Association of Realtors.
This accelerates a trend we’ve observed among young people for some time, but it’s poised to remain a persistent issue with lasting effects on wealth building for younger generations, says Teri Williams, President & COO of OneUnited Bank.
"When we look forward, the question is, how are we as Americans going to accept the fact that our children may have less opportunities to build wealth than we did as their parents," Williams says. "That’s a difficult reality for a lot of us to face."
Part of the reason younger generations are buying homes later and later is because they have significantly more debt than their parents. A shortage of starter homes and affordable housing further compounds the issue.
Banks can help bridge this gap by offering services such as down payment assistance, Williams says. They can also adjust their underwriting to finance affordable housing based on existing rents, rather than those in the broader community.
Younger Generations are Increasingly Interested in Investing
Perhaps as a result of not being able to afford housing, young people are increasingly looking for other ways to build their wealth. Part of this has spurned an increased interest in investing in the stock market.
"We’re seeing a big interest in banking and investing. We’re also seeing an appetite in crypto. It’s becoming more mainstream," says Sue Burton, executive digital and marketing leader at Digital Federal Credit Union.
Experts say the barriers to entry for investing have diminished, enabling individuals to start investing with smaller amounts of money at a younger age and gradually build wealth over time.
"When I was out of school, it took a lot of upfront dollars to invest — and today you can do it for a lot less," Williams says. "That’s part of the reason I’m hopeful that other types of investment vehicles can supplement the wealth building that home ownership used to provide."
Gen Z is increasingly turning to financial influencers on social media for advice on how and where to invest. To engage this younger audience, banks should consider leveraging marketing strategies to provide financial education, says Burton. For instance, Digital Federal Credit Union launched an educational campaign through the media platform Vox, aiming to teach younger generations about the benefits of credit unions.
As this demographic enters its prime earning years, fostering these connections early can position banks and credit unions as go-to resources for their evolving financial needs, from investing to saving and beyond.
