What Gen Z and Millennials Want From Banks: 5 Key Insights

Millennials and Gen Z are coming into themselves in different ways as the banking industry tries to corral them as customers and tap their creativity as employees. But their financial struggles coexist with their struggles in the office. Here's what banks and credit unions need to understand about these two generations.

It’s easy to conclude that every generation experiences the same growing pains from adolescence through adulthood.

But many generational experts concede that Gen Zers and Millennials are unique in their needs. Although a portion of older Millennials has secured a mortgage and has started families, neither of the two generations are fully rooted yet. With macroeconomic challenges like inflation and a rocky housing market, the two young generations say they feel as uncertain as ever, both as customers and in the workforce.

What are the biggest sets of hurdles the two generations share?

1. Gen Z & Millennials Want Hybrid Work Environments

Gen Z and Millennials both admit they prefer a hybrid work lifestyle — primarily because it helps them save money, frees up their time to do what they care about, allows them to see their family more often, makes getting the work done easier and positively impacts their mental health.

Deloitte spoke to people from these two generations for its Global 2022 Gen Z and Millennial survey. Serrava, a 25-year-old U.S. resident, was grateful for the Great Recession’s impact on the traditional workforce. “More jobs are implementing permanent work-from-home options, which I think is the greatest improvement,” Serrava said. “Restoring the option to stay home and work gives people their lives back.”

Roughly one out of every five Gen Z employees (19%) and Millennial employees (20%) said they would always want to work in an office. A little over three-fifths of both Gen Zers (63%) and Millennials (62%) said they prefer hybrid. Only a little over a tenth of each generational group say they enjoy a fully remote lifestyle.

“In addition to where they work, Gen Zers and Millennials want flexibility in how and when they work,” Deloitte states. “They’d like their organizations to offer flexible working hours and potentially reduced work weeks.”

However, companies must take care to roll out hybrid work environments effectively. The Deloitte study shows that a fifth of both generations who work from home exclusively have struggled with colleague connections and finding strong mentors.

Don’t Implement Without a Plan:

Both Gen Zers and Millennials want to work in a way that works for them. However, execution of remote work environments requires careful planning.

“Businesses have a responsibility to make hybrid work arrangements work for everyone,” the Deloitte report reads. “A big part of that will be fostering more diverse and inclusive work environments, which account for different working patterns and preferences.”

2. Generations Living Dangerously Close the Edge

Money may not be the only thing Gen Zers and Millennials care about, but it is still a deeply embedded concern — for both generations.

Nearly half of both Millennials (47%) and Gen Z (46%) say they live paycheck to paycheck and are in constant fear they won’t be able to cover their monthly expenses.

Julia, a 21-year-old student in Australia, told Deloitte her financial burden is heavy. “I do think our generation struggles with high cost of living and financial concerns,” she said. “I think the housing market at the moment is crazy and is nothing like what our parents’ generations faced. I currently have three jobs. I have to do this in order to make enough money to live my life as a full-time student.”

Julia isn’t an outlier. More than two out of five Gen Zers (43%) and a third of Millennials are working a second job (part- or full-time) to compensate for high-cost expenses and low-wage careers, Deloitte found.

Some segments of the two generations also expect they won’t be able to retire comfortably. The cost of living is far too high, the two generations agree, as found by Deloitte. It is a top concern — ahead of other lifestyle fears such as unemployment, mental health, health care, sexual harassment and even crime.

Even so, a separate study GoBankingRates found that while money is a top concern for Gen Zers, it is not their only priority in a job. A quarter said work-life balance is what they want most from their career, and a fifth said passion for their career is most important. Meanwhile, 16.5% said they care solely about the money when it comes to job decisions.

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3. Mental Health Concerns Hold Back the Youngest Generations

More offices around the U.S. are implementing work-from-home options and the conversation around mental health is accelerating.

It’s a critical conversation — one with plenty of risk if banking doesn’t acknowledge the need for it.

“Considering more than 60% of college students met the criteria for one or more mental health concerns, companies that don’t address and invest in Gen Z’s well-being will pay the higher cost of lost talent tomorrow,” Business Journals writes, citing a Mind Share Partners report, which found that half of workers left their jobs in 2021 in part due to mental health.

In the Deloitte survey, more than half of both Gen Z (53%) and Millennials (51%) said that the mental health conversation in the workplace is not moving fast enough. They said their employers are discussing mental health more often, but it “has not resulted in any meaningful impact on employees.”

Many also blamed their workplace for their high stress level, Deloitte found. A third of Gen Z (34%) who reported feeling regularly stressed attributed it to their workload and another third (32%) said it was due an unhealthy work-life balance.

“I’d like to think the Great Resignation might lead to more serious commitments from senior leaders to adapt to the way Gen Zers and Millennials work, and provide real support, not just lip service,” 29-year-old Matt told Deloitte. “If I were to stay within a large company, a four-day work week is also something I’d like to see happen — I tried this and took a pay cut to allow for it, but my KPIs weren’t cut, and it made it untenable.”

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4. Gen Z & Millennials Want Financial Literacy

Acquiring financial literacy is critical to Gen Zers and Millennials and both generations say they want more help in that effort from their primary banking provider. For Gen Z in particular, financial health is just as important (if not more so) than their physical health.

The problem? The financial literacy rates are lowest among Gen Z and Millennial adults, according to a TIAA Institute report. Roughly two thirds of Gen Z respondents couldn’t answer more than 50% of general financial literacy questions correctly.

One might argue that, given the youth and lack of financial experience associated with these two younger generations, their financial literacy may be low as a result. However, Gen Z is also the generational group most likely to have participated in a class offered through a school program, the TIAA report found.

Digitally savvy as they are, these two generations are turning to social media to learn how to handle their finances — a concerning trend.

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5. Social Media As a Financial Literacy Hotspot

Gen Z does not believe they were properly educated on finance through school, especially not on the topics they feel are the most important to know about, according to a GoBankingRates survey. As a result, over a third (38%) of this generation is learning about personal finance from social media (34% cited TikTok specifically). In comparison, just 17% are learning from a high school or college class.

One financial institution is winning over Gen Z and Millennial employees

Up, a digital bank based in Australia, has generated buzz for its attention to Gen Z and Millennial employees’ needs, which has carried over into customer engagement.

“We work with a support team that’s very youthful, and we lean on them to ensure we’re culturally appropriate,” Creative Director Pete Johnson told SmartCompany. “We have a direct line of feedback on all channels, including our socials like TikTok and Instagram.”

In a separate study, Credit Karma found more than half of both Gen Z and Millennial populations (56%) said they “intentionally seek out financial advice online or through social media.” Credit Karma also found that Gen Z gravitates toward TikTok, where, not coincidentally, more bank marketers are turning up. Meanwhile, one out of two Millennials cited Facebook as a source of financial advice. Both generations also rely heavily on Instagram.

About a third of both Gen Zers (31%) and Millennials (35%) will head over to the blog of a bank or credit union, however, so there is an opportunity.

Something to Think About:

A good way to learn more about the financial habits of Gen Z and Millennials is to engage with employees from those generations.

The difficulty of social media as a resource is it could contain misleading advice. As GoBankingRates points out, easy access to financial wellness tips may not account for the quality of the information.

“While there is certainly some valuable information to be found online, there aren’t many restrictions as to who can post online and what they can say,” the GoBankingRates report said. “If Gen Zers aren’t vetting the information they’re receiving, they could be susceptible to financial misinformation.”

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