Demanding and financially literate: how “Generation Z” challenges the banking sector

The generation born between 1997 and 2012 is actively shaping new standards for relationships with financial institutions and adapting them to their own needs. This is not surprising, as the total number of “Gen Z” representatives is almost 2 billion people worldwide. And these are the people who are the new financially independent age group that sets trends. UNN investigated why this is a challenge for the banking sector and how to adapt to the new demanding client.

“Generation Z” grew up in a world of rapid technological development and formed as consumers who demand speed and do not forgive mistakes. Instant transfers, a high level of service, convenient banking applications – all these are basic requirements of the new financially active generation, not a technological miracle, as it was perceived before. “Gen Z” does not expect mercy from banks – this generation expects an instant push notification about money being credited to the account. In addition, young people want personalized solutions that match their values and lifestyle. Such expectations force the financial sector to change, explains fintech expert and co-founder of the first fintech ecosystem in Ukraine, Concord Fintech Solutions, Olena Sosedka.

The financial expectations of the new generation are fast, real-time payments, personalized products and services that align with their values. Young people seek AI-powered tools and flexible financial solutions. The new generation should not be perceived as irresponsible or short-sighted. “Gen Z” is the first generation that grew up with the cryptocurrency market in their pocket. This is a generation of pragmatists who are acutely focused on securing their financial future.

Research confirms the expert’s words. According to data from the World Economic Forum, Gen Z representatives save an average of 14% of their income, as they have a culture of a “financial cushion.” At the same time, they have a higher interest in cryptocurrencies and digital assets than older generations. Thus, 42% of “Generation Z” representatives have already invested in cryptocurrency. It is also noteworthy that women of this generation are 50% more likely to invest in digital assets than representatives of other generations.

Despite the fact that online banking and mobile applications are critically important for young people today, it is too early to completely abandon physical bank branches. Surveys show that 43% of “Gen Z” representatives consider physical bank branches important, as they provide a “sense of calm and security.” For this generation, the value is not so much the online or offline format itself, but the overall level of service. This refers to a comprehensive approach: quick response from customer support, simplicity of the account opening process, transparency of tariffs, absence of hidden fees, and intuitive platform design.

The new financial generation does not reject traditional banking tools and is open to innovations that combine both worlds. They approve of the idea of central bank digital currencies and support the tokenization of real assets to trade them on the blockchain. For “Gen Z,” a bank is no longer just a place to store money, but a service that is used daily and should be as convenient as their favorite digital products: TikTok or Spotify.

It’s no surprise that 82% of this generation are willing to switch banks for better digital service. For financial institutions, this is a signal: young people don’t cling to a brand out of tradition or habit; they choose whoever provides the best experience here and now. And those banks that ignore this demand risk losing an entire generation of customers who are already shaping the market and will define it for decades to come.

Conclusion”Generation Z” poses new challenges to the financial industry every day. It strives for speed, technology, and personalization. At the same time, it expects security and human contact from banks in critical moments. Therefore, those banks that can combine innovation with trust and customer focus will gain not just new users, but loyal customers for decades to come.

For the banking sector, this is not only a challenge but also an “exam for survival.” By adapting today, they will be able to remain competitive tomorrow – in a world where financial habits are shaped by the youngest and most demanding customers.