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Gen Z vs. Millennials and Baby Boomers When it Comes to How They Bank

How do financial institutions meet the needs of Gen Z, millennials and baby boomers when each is apparently so far apart? One solution is not to believe the hype. Although each of these three sizable generations brings a different backstory to banks and credit unions, they are all looking for much of the same thing — an intuitive, personalized user experience. That means financial institutions should look beyond the stereotypes about baby boomers and technology, for example, and focus on the current needs of each generation. Adopting a forward-facing perspective reveals that Gen Z and millennial expectations in banking are remarkably similar to those of their baby boomer counterparts.   

Gen Z vs. Millennials vs. Baby Boomers: What Do We Already Know?

Anyone born between 1946 and 1964 qualifies as a baby boomer, covering an age range of 57 to 75. There are 72 million baby boomers in the U.S. and their generation is far more nuanced and complex than the throwaway ‘OK, boomer’ tagline suggests. 

Who Are Baby Boomers?

  • They grew up in the era of powerful global brands that inspired loyalty. It worked. Today, 72% of baby boomers trust their bank most with their money. 
  • Convenience matters. Baby boomers are more likely to open a bank account based on the local presence of a branch and ATM. 
  • As a whole, they’re wealthy. The youngest baby boomers will turn 65 in 2029, at which point their generation’s assets will reach $26 trillion
  • However, they’re not all basking in accumulated wealth. One in five baby boomers still plan to work past retirement. 
  • Although they’re often portrayed as technology slackers, 68% own a smartphone, and they are quick to adapt to new technology. Baby boomers haven’t ignored new technology nearly as much as new technology has ignored their generation in terms of marketing. 

Millennials, on the other hand, were born between 1981 and 1996 — meaning that the oldest are just reaching their forties. They are the most populous generation in the U.S., numbering 73 million and have the most disposable income. Their idealism and sensitivity is misleading, and millennials are surprisingly focused and prudent. 

Understanding Millennials

  • They are technology natives who have grown up with a close affinity for digital and mobile applications. 
  • As they start to wrestle with health and pension savings, mortgages and other long-term investments, they are hungry for help with financial planning. 
  • They can be distrustful of established institutions and fickle with their loyalty. In one study by Deloitte, only 33% of millennials would see a bank as a natural partner in financial planning. 
  • When it comes to choosing their bank or credit union, they are more likely to value recommendations from family or friends. 
  • Contrary to the myth that they hop freely from mobile platform to platform, 44% of millennials bank with the big three (Bank of America, Chase, Wells Fargo) and 68% of millennials still see the physical branch as an important part of the banking experience. 

Introducing Gen Z

Gen Z covers those born between 1997 and 2012, making them the first truly digital native generation. Their older members are starting to make an entrance on the financial planning landscape. Here’s why they shouldn’t be confused with millennials:

  • Borrowing isn’t a huge priority for now. The eldest Gen Zers are focused on opening accounts and lines of credit. 
  • They are significantly more diverse, mobile and technologically adept than any generation before them. 
  • They have adopted a prudent, conservative approach from their parents, but lack the financial education to make decisions. 

What Do Millennials and Gen Z Expect from their Digital Banking Platforms?

Financial institutions do not need to convince millennials or Gen Z of the value of digital, but there is work to do in delivering the experience. Both generations have grown up sharing their data freely, but with the understanding that it will power artificial intelligence or machine learning algorithms for a better, more personalized experience. Right now, they’re not convinced, and 85.5% are frustrated with the financial services offered by the traditional providers on mobile. Furthermore, this negative perception is consolidated by the fact that millennials bore the full brunt of the 2008 financial crash and Gen Z witnessed their parents go through economic uncertainty. 

How Financial Institutions Can Respond

Banks and credit unions need to rebuild trust and deliver transparency, focusing on experiences rather than transactions. That’s especially important at a time when millennials are starting to plan long-term investments and purchases and Gen Z is searching for a solution they can trust. Some of the things financial institutions can do digitally are:

  • Make it easy to apply for new services and get documents notarized.
  • Improve access and communication through chatbots, tailored services and personalized financial support.
  • Offer financial education through learning resources and add value through budgeting and saving tools.

Bearing in mind that millennials and Gen Z are accustomed to omnichannel payments spread across a portfolio of cards, apps, wearables and cash. Security is their number one concern. 

What Do Baby Boomers Want from Their Financial Institutions?

Baby boomers also have a wide variety of urgent concerns as they struggle to juggle pensions, investments, mortgages and credit cards — often on top of taking care of their children’s and parents’ finances. As Forbes notes, baby boomers aren’t just struggling to manage a wide variety of personal accounts. They also have to grant and manage access to accounts on behalf of the generations that sandwich them — college funds, life insurance and pension plans for their children, inherited estates and retirement costs for their parents. 

The Digital Banking Solution Baby Boomers Need

Baby boomers just want a dashboard. They are searching for a solution that allows them to integrate and monitor their portfolio of investments, health and life insurance coverages, pensions and more. While they’re less likely to change long-entrenched behaviors like millennials do, they are willing to respond to flexible features powered by AI, especially when it allows them to tailor services to their personal needs. Like millennials, they worry about fraud and are frequently targeted by scams. 

The Effect of the Pandemic on Gen Z vs. Millennials and Baby Boomers

The pandemic accelerated the shift from face-to-face interactions to digital banking, and 35% of consumers have increased online banking as a result. Clearly, baby boomers make up the largest proportion of late adopters to online banking, but none of the three demographics is overly satisfied with the digital banking experience that’s being offered. Concerns about cybersecurity abound, as do frustrations with clunky mobile interfaces and bloated apps. Banks and credit unions must shift investment from legacy software to digital banking to meet the current challenges of an increasingly cashless society. 

How One Digital Platform Can Satisfy All Three Generations

These three seemingly distinct generations share several common pain points. They each need personalized experiences, simplicity and integration. Millennials and Gen Z urgently need financial education and support to guide them through their years of peak earning potential. Baby boomers need expert advice to help them make the most out of the products and services they already have in place. Each generation values the human aspect of banking, but as a trusted advisor, not a service provider. 

End users in either generation want to see their data put to a greater purpose. That calls for empathy-based marketing through AI, in which the bank or credit union can personalize suggestions and functions based on customer usage patterns and market trends. With Lumin Digital, features can be tailored to the services that matter most while eliminating the bloat that plagues many banking apps. 

Baby boomers get the high-end user interface that streamlines their financial portfolio. Millennials enjoy the smoother onboarding experience on mobile, using biometric security and machine learning to protect and authenticate sensitive data transfer. Gen Z gets the responsive, personalized user experience they’re accustomed to in their everyday apps. Each generation has the peace of mind of strong encryption and robust cybersecurity features.


Forbes – The Next Generation Of Banking Consumers Are Baby Boomers (Not Gen Z)

Deloitte – Trends in millennials’ banking

Adobe – Nailing Mobile Banking is Key to Cashing in On Millennials

PWC – 2019 Consumer Digital Banking Survey: The ever-changing consumer

KPMG – Setting course in a disrupted marketplace

McKinsey – FinTechnicolor: The New Picture in Finance

Morgan Stanly – How Millennials and Gen Z Could Reinvent Banking

Deloitte – The future of wealth in the United States