Financial institutions that lag in technology may lose the trust of younger consumers.

Gen Z customers, who are often motivated by their social values and mobile-first lifestyles, trust PayPal and Apple more than they trust traditional financial institutions, and millennials will leave a bank due to a poor digital experience, Tiffani Montez, principal analyst at financial services-focused business intelligence firm eMarketer, said during a panel at last week’s CBA Live 2025 in Orlando, Fla.

“Gen Zers — they’re not out searching for banks. They’re actually using social media platforms such as TikTok, Reddit and Snapchat to do all of their banking research,” Montez said. Banks that don’t adapt “risk losing an entire generation of customers,” she added.

Driven by a need for speed and security, 70% of Gen Z consumers choose digital payment methods, such as peer-to-peer payments, Dheeraj Maken, practice director at consulting firm Everest Group, recently told Bank Automation News.

While millennials have more banking experience because they are older, 32% indicated they would leave a bank due to a poor digital experience, Montez said.

“Millennials are a bank’s biggest opportunity, but also your biggest flight risk,” Montez said. “[They] will be loyal to you if the experience is right, but if it’s not right, they are gone.”

Approximately $100 trillion of wealth will be transferred from baby boomers to younger generations during the next two decades, and financial institutions must be prepared to serve them, Hemal Nagarsheth, head of strategy for banking, lending and trust at $1.7 trillion Wells Fargo’s Wealth and Investment Management segment, said during the recent Bank Automation Summit 2025.

AI-powered advisement

Gen Z and millennial SMB clients are also driving innovation in banking, with 80% indicating they’d consider a digital-first bank, Nick Cowell, partner and U.S. banking strategy leader at consulting firm Deloitte, said during a panel at CBA Live.

For example, younger business owners are seeking personalized financial advice from their financial institutions, Cowell said, adding that the insights don’t necessarily come from a person, but could be AI-driven or via self-service.

“Millennials want AI-driven financial coaching, and not just for insights,” Montez said. “They want the ability to get personalized advice on things like how to manage their money smarter and even more efficient.”

Next-gen bankers

In addition to appealing to millennials and Gen Z, banks need to invest in younger future customers, Scott Watson, executive vice president and chief information officer at Warren, Pa.-based Northwest Bank, said at CBA Live.

The $14.4 billion Northwest is exploring how to use digital banking apps to promote financial literacy to youth to prepare them for the future, Watson said.

“We’re looking at, how can we deliver that different theme that might be meaningful to a 13 to 18-year-old,” he said.

App features the bank is exploring include:

• Direct deposit;
• Card control; and
• Gamified learning tools.

Visa teamed up with Marvel in 2011 to create a financial literacy comic book, but technology today can create a more seamless experience for the young consumer, Watson said.

“You can digitize that, put that in there and really help these young people understand finances.” he said.

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