What Gen Z Thinks About Banks and How They Manage Their Money

What does Gen Z look for in a banking provider? These 'digital natives' crave technology, but some still want brick-and-mortar branches. Profiles of four members of this up-and-coming, enigmatic and increasingly important generational segment offer financial marketers real-world insights.

Does Gen Z care if they use a traditional bank or credit union? Do they open their own accounts? What do they know about managing money and where did they learn it? How much interest do they have in investing? What role do traditional banking providers play in the increasingly complex, fractured and digital financial lives of Gen Z? And as “digital natives,” do they gravitate to fintech products like Venmo?

The Financial Brand sat down for a series of one-on-one interviews with four members of Generation Z to get their perspectives on what they like and what they’d like to see change. Unlike a traditional focus group where people can be influenced by views of others, these individual sessions evoke unvarnished views and insights.

Sanjay The Saver

Born in the late 90s in Massachusetts, where he grew up in a nice house, Sanjay says he couldn’t stop thinking about spending his cash, always wanting to blow his birthday and Christmas money on toys the very next day.

It was a constant battle with his Gen X parents (both born in the early 60s) who wanted him to wait and really think about what he was buying.

When he turned 12, they helped Sanjay open his checking and savings accounts with Bank of America under their joint account – just so they could monitor his spending. They watched his brother and sister spend recklessly and were concerned he would develop the same habits.

Sanjay says his outlook changed when he was 15 or 16 and saw that his older Millennial siblings, who had ditched their degrees, struggled through life because of their monetary problems.

He decided then he would not let himself get to that point. He’d save as much as he could and now, years later, it’s paid off. His balance never dips below his comfort level.

“I know it’s dumb, I don’t have expenses. My parents pay for college, they pay for my food, gas or whatever I need. But, I just really panic if my savings drops below like $3,000.”

— Sanjay

When he did spend money throughout high-school and early college years, Sanjay says he loved Venmo, a P2P fintech. However, he quickly realized this last year of school the downside of Venmo, which made him manually transfer any income to his bank account – either paying a small fee or waiting several days.

He has since switched to Zelle on the Bank of America app, where the transactions show up in his account within seconds.

Yet, despite the dexterity of Bank of America’s system and the security infrastructure the bank has in place, Sanjay struggles with the physical disconnect between his bank and his university.

“When I went to school, it was hard because my university had ATMs with another bank, People’s United,” Sanjay says. “I had to Uber to deposit money in Bank of America’s closest ATM in my freshman year.”

Although it was not a big deal, he says, it was an inconvenience. He’s lived on campus all four years and it’s a pain to add another errand to the occasional off-campus trips.

“I used to go into the bank quite a bit,” Sanjay says. “My parents did and so did I. Now, there’s hardly a reason for me to go since I’ve figured out how to deposit checks I get on the app.”

( Read More: Four Ways Banks Must Change Before Millennials & Gen Z Will Love You )

Omar the Investor

On the other side of the spectrum is Omar, who isn’t even yet 21. He’s renting a house with his college friends, works in his free time and has money tied up in the stock market.

He grew up in New Jersey, where he estimates he had at least ten jobs throughout high school. Although his parents started a college savings account when he was a teenager, he opened his first account on his own as an upperclassman through Wells Fargo.

“I just wanted to try something new,” he says, when asked why he switched.

After he graduated high school, he waited a few months and opened up a Discover student card, which Omar says gives a student $20 for every year they get good grades and promotes easy cashback reward programs, which change quarterly.

Is that significant? “F@#$ yeah, 5% cashback on Amazon” during Christmas time, he jokes.


Omar says he doesn’t even know his interest rate since he tries to keep his credit card balances low or at zero. (Discover reports students get 0% APR for the first six months and after that, it can range anywhere from 13% to 22%.)

“I tried not to have much on [my account] when I first got it,” Omar says. “It got hard when I realized how much my friends wanted to go out to eat, but I’ve done pretty good. I wanna get a second credit card eventually, but I don’t think I will until college is out.”

Since he’s had multiple types of side jobs in different industries, he says banking needs to be easy and quick.

“I don’t even remember the last time I went into the bank or wrote a check, man. It’s all on my phone. Why would I go into a branch and wait 15 minutes in line?”

— Omar

“I mean, I still need the ATMs to deposit cash – I always have cash on me,” Omar added. “The only tough part about drive-thru ATMs are the lines, especially in Jersey. Checks are easy to put in my account, cash not really.”

( Read More: Gen Z Prefers Banks to Big Techs, But Shuns Branches )

Omar is always thinking about ways to make more money. He started to learn how to invest before he turned 18, dabbling with educational stock systems when he was younger, which let him invest fake money in a simulated stock market and see how the investments performed.

“That s#@! was good to learn from, but it’s way better to actually get a payout from it. I am only [investing] little bits of one paycheck at the moment,” he says, adding he only invests about $20 to $50 each month.

“I can’t really do more than that. It’s risky and it’s not like it’s the greatest thing to be doing with not a lot of money.”

Although he has not taken classes on investing, he believes he knows more than the average consumer. He researches, keeps an eye on stock movement and says he’s been successful watching social media trends before buying. Although he’s tried other investing apps, Omar says Robinhood will always be his favorite.

“I’d love if banks got more into teaching kids how to invest. I feel like our generation would be better off if we all knew the investing game.”

— Omar

Ana the Cash Back Lover

19-year-old Ana is quite different from the first two. She doesn’t invest, she doesn’t worry about saving all that much. She opened her up first savings account with her parents at Wells Fargo in Florida as a young teenager, later transferring her balances to a checking account at U.S. Bank when she went to college.

Contrary to what her high-school financial education courses taught her, Ana’s parents convinced her to start a credit card line with her bank and apply for an American Express card. The theme she says that runs through her family: cash back.

“I’m a college student. I can’t tell you how nice it is to buy what I need online and get money back for it. It’s literally like I’m getting paid to spend money.”

— Ana

For instance, Ana says she earned enough money over the holidays to pay for her gas bill.

“If students don’t have a credit card where they can get cash back, I don’t know what they’re doing,” she says.

In what seems like a generational trend, Ana says she loves Venmo (SeekingAlpha reported in 2019, 75% of Gen Z individuals says Venmo was their preferred payment method).

She hadn’t heard of Zelle – one of Venmo’s direct competitors – until she opened her U.S. Bank account and even though she’s heard great things, she still hasn’t used it.

“Everyone I know in school has Venmo,” Ana says. “It’s quick, I can keep money in my account, I never have to transfer it into my bank account. There’s always funds in Venmo that I can easily send to my friends if they get me food and vice versa. I should see, actually, if Venmo has a cash-back option.”

( Read More: Why Millennials and Gen Z Love Megabanks )

While U.S. Bank’s app is simple for Ana to navigate and perfect on the go, she still goes to the bank on a regular basis. It’s just frustrating, she says, to call the bank and get someone on the phone when accidents happen, like when her account information was stolen.

“It’s important to have a relationship with your bank. I know it’s a very traditional concept, but my parents say I should go in more often. When someone stole my account information I was glad I could go into a branch to resolve the issue.”

— Ana

According to Ana, the stolen account information is another great reason she uses credit cards.

“Credit card companies are just more proactive, I think,” she says. “I’ve had to call and cancel transactions before, and they take care of it right away. I don’t even have to prove it was a mistake. But, when my U.S. Bank account [information] was stolen, it was a whole big thing. I needed a new card, new account number. It was really stressful.”

Chloe the Skeptic

Chloe, a junior in college, says she’s never met another kid her age who banks with a credit union. But she’s a human billboard for the one she uses, showing the power of word-of-mouth marketing. A Massachusetts-based digital native, she says she loves her local Digital Federal Credit Union branches and the mobile app they have.

“Digital Federal is just easy,” she says. “The one in town knows my parents, they helped me and my sister open our first accounts. I think my parents have the mortgage of the house under Digital Federal.”

Chloe explained her family has banked with DCU for years, having opened accounts shortly after it opened in 1979. She has both a checking and savings account with the credit union and, while the university she attends also has a relationship with a local bank, she has no intention of changing financial institutions.

Although she loves her credit union, The Financial Brand asked Chloe what she still wants to see from DCU and what digital features she’d like in the future.

“Honestly, they have great service, but I’d really like it if they had more of a digital wallet. I don’t trust putting my account info into Google or Apple Pay. I trust my credit union with my account information.”

— Chloe

As a member of the first generation of “digital natives,” Chloe says she has never written out a check and barely carries cash on her. Only 40% of Millennials reported carrying cash on them at all times, according to a survey conducted by Travis Credit Union. And industry experts expect the trend will only expand.

For instance, Chloe’s dream – while she’s skeptical of digital companies ¬– is to not even need her wallet.

“I’m always worried about going with a big bank or credit card company because I know the people at Digital Federal,” she says. “But, if they could have a digital wallet on their app specifically, that would be my ideal situation.”

The Wrap:

Gen Z is the first, but certainly not the last, breed of ‘digital natives.’ Some are very comfortable with what their banking providers offer now, some still want branches and others expect more digitization.

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