Top 5 Digital Banking Features for Generation Z

By doing so, banks can capture their loyalty and retain their new clients for life.

Generation Z, or "Gen Z" for short, is the newest cohort of tech-savvy professionals. They will account for 27% of the workforce by 2025, and hold up to $33 trillion in assets. This group was born between 1997 and 2012, so they only know an always-connected world.

When it comes to banking, what, exactly, does Gen Z want? A fantastic digital experience. To connect with Gen Z, you need to connect with them where they are - their devices.

How do you do that?

Here are the top five digital banking features that will make Gen Z customers light up TikTok with their fantastic experience with your bank.

Top 5 Digital Banking Features for Gen Z

Feature #1: Make it personal. Really personal.

Gen Z was born into the digital world. As such, many of the older attitudes around privacy are less critical. Gen Z values a digital banking platform where they can get basic financial necessities like a checking account while also tending to more abstract goals, like saving for a house.

It's not just about a checking account with $10,000 in it; it's about their checking account and how that $10,000 relates to their goals. If that same platform gives them investment options where they can upload a picture of the home they’re saving towards, that would be even better. Bonus points if they can find a house photo with a cute dog.

The stakes here are incredibly high. I've seen research that suggests that over seven out of ten consumers expect companies to provide personalized interactions. Personalization drives revenue, and customized messages encourage repeat business.

And with the rise of AI, these expectations will only grow. Gaming companies, stores, and even banks use AI to further tailor and customize customer experiences.

Feature #2: Instant banking

For as long ago as it may seem, there used to be a time when customers would have to wait days or weeks to access statements. With smartphones, things became much quicker.

Now, Gen Z prefers instant payment options. Venmo, Google Pay, Apple Pay, and Zelle are all great examples of real-time transactions. Gen Z likes to split bills instantly and reimburse friends. Most importantly, they want to see balances updated immediately. Waiting for transactions to clear is not a good customer experience.

They enjoy this type of instant banking because it is far less prone to errors. If they want to pay a friend for their dinner, they don't have to carry around cash to reimburse them. They can send an instant payment and the bill is settled immediately. No waiting involved.

Gen Z will demand more of this type of "instant banking" from institutions. Banks that don't implement these instant payment methods will quickly lose market share. For example, if you don't allow your credit and debit cards on Apple Pay or Google Pay, a portion of the population will simply not bank with you.

Feature #3: Personal finance optimization

I love the fact that Gen Z is interested in becoming financially savvy. However, they're not looking to do it through financial advisors and balancing a checkbook manually.

Instead, as you might expect, they're looking for these personal finance options online through their bank's mobile app. Sure, there are apps like You Need a Budget, but what if banking apps could include these capabilities? After all, banks can access transactional data that apps like YNAB need to import. It cuts out one step in the process.

Fortunately, I've noticed more banks becoming aware of this. They've started including personal finance management tools, including AI-powered ones, into their apps. And it's working – over 20% of all Gen Z mobile banking app users create savings goals and track progress.

Incorporating all financial needs, including goals, into banking apps is crucial to meeting Gen Z where they are – in technology, not in a branch.

Feature #4: Access to information

Gen Z values transparency and honesty and has grown up less concerned about privacy than previous generations. As such, they want information.

Have you noticed that many banking companies also give out free credit scores? If you log into your bank, you can check your credit score free of charge.

Banks are doing this partly because it's a personal finance management tool. However, they're also giving Gen Z additional information, i.e., context from which they can make their own financial decisions.

Gen Z greatly values this ability to gather all information in one place. It saves them time and managing different logins. The more information you can provide, the more honest and open your bank seems. And since this generation is most likely to do business with companies that align with their values, promoting transparency and information awareness helps your bank show that it aligns with these core principles.

Feature #5: Going beyond banking

Gen Z wants banking to be holistic. Their app should integrate with non-financial services, too.

Imagine a world where you could pay for an Uber through your banking app. Seamless integrations like this are what Gen Z wants. They have so many apps already – what if the banking apps, their financial hubs, were the ones that helped simplify daily life?

Banks have already responded to this through cash-back offers, sales, and other perks that help bring clients value. However, there are so many more integrations and partnership options. Banks that are the most open to these types of arrangements are the ones that will succeed the most.

There is already evidence of success with this model. China’s WeChat is, without a doubt, the most prominent example of how building a super app, where consumers can get all their needs fulfilled, pays off big time.

Revolut, Europe's largest neobank, appears to be following suit. They are striving to create an in-app experience that covers a whole range of customer needs – from ordering food, online shopping, and making payments, to chatting with friends.

While Revolut isn't quite there yet, it's seen tremendous growth. In fact, it has far more customers than any other European neobank. The results are already self-evident.

Gen Z is craving a brand new banking experience

The bottom line is quite simple: Gen Z craves a new approach to banking. One that is faster, more straightforward, and more helpful. The last word there is perhaps the most important. Offering ‘just’ a checking account won't cut it anymore.

I believe the banks that thrive over the coming years and decades will be the ones that are the most helpful to Gen Z customers. They'll create custom solutions, many of which will be powered by AI, to help Gen Z achieve their dreams and simplify their lives.

Their banking app will help them get an Uber to work while assisting them to figure out what they need to do to afford their first home.

The building blocks of this new digital world are still checking and savings accounts, electronic funds transfers, and other old clearing technologies. However, banks should focus on combining all these core building blocks to help the next generation unlock their financial potential. That's what Gen Z wants, and banks must deliver to remain competitive.