The Gen Z banking story is one of wild contradictions—contradictions that create both chaos and opportunities for bankers.
It’s the market research paradox: Consumers don’t do what they say they are going to do.
And while there has always been a gap between what people believe and what they do, it could not be truer of Gen Z when it comes to banking.
Here are the three biggest contradictions that I’ve come across in Gen Z banking studies:
WHAT THEY BELIEVE:
Gen Z wants to work with companies that share their values. And they have the lowest approval rating of both Wall Street and American capitalism than previous generations.
WHAT THEY DO:
Gen Z are more likely to choose national, Wall Street-focused banks than previous generations ever did. According to Apiture Research, nearly 80% of Gen Z banks with a national bank. Just 2% bank with a community bank, according to the same research.
WHAT THEY BELIEVE:
Gen Z gives local businesses higher marks for customer satisfaction and service. It’s why a Constant Contact study released earlier this year shows Gen Z is twice as likely to shop at a local, small business than Baby Boomers.
WHAT THEY DO:
When pulsed for a proprietary research project, Gen Z—in overwhelming numbers—assumes that community banks offer less services than big banks, choosing national over local.
WHAT THEY BELIEVE:
Gen Z prefers digital services with little human interaction. This is obvious in the proliferation of neo-banks and cash apps.
WHAT THEY DO:
According to Forbes, a whopping 86% of Gen Z prefers human, voice-based, or phone support for complex and urgent issues. They value quick, personalized, empathetic interaction but, unlike older generations, they will abandon a brand if self-service fails.
So to recap… on paper, Gen Z says they’re looking to work with smaller businesses that share their values, offer better services, and can provide human-centric customer-service solutions whenever they need help.
That should be music to any regional bank’s ears. Regional banks appear to be perfectly teed up.
So why has Gen Z so definitively turned away from community banks?
In a fascinating article from Marketing Week, consumer insights researcher Dr. Carol McNaughton Nicholl puts it starkly, “It’s these contradictions that point towards areas of opportunity, where people are saying they want to do something, but are unable to do so.”
In other words, Gen Z isn’t lying about what they want in a bank—they genuinely mean it—but they ultimately choose differently because they assume the options they want aren’t actually available or realistic.
This is a surprising advantage that community banks should consider when developing their messaging and outreach. How? Well, that’s a story for another blog.
