Modern Banking Experiences for Gen Z & Millennials

As the world of finance evolves further into the 21st century, banks, credit unions, and fintechs are working to build sustainable solutions that will connect with the largest possible segment of customers. This whitepaper explores new research around generational perspectives.

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As the world of finance evolves further into the 21st century, banks, credit unions, and fintechs are working to build sustainable solutions that will connect with the largest possible segment of customers. Several factors, however— including new technology, the ongoing COVID-19 pandemic, aging demographics, and wealth transfers—pose significant questions as to how financial institutions (FIs) and fintechs can more deeply connect with and serve their customers.

There’s a lot on the line in this race to gain (and retain) loyal customers. There’s also abundant opportunity for innovative FIs. For example, the largest transfer of wealth in U.S. history is taking place, as Baby Boomers have already begun transferring their assets and fortunes to the younger generations — Generation X, Millennials, and Gen Z.

Close to $70 trillion has been set in motion, highlighting the need for institutions to more fully understand today’s banking attitudes as well as the habits and preferences of these different groups.

What follows is a review of generational research we conducted with our partners Finn AI, Q2, and Rival Technologies as well as a guide to creating modern money experiences that engage the younger generations.

Methodology Summary

This study incorporates feedback from 1,039 respondents from various regions across the United States Approximately 40% of the responses come from the Gen Z segment, 40% from the Millennial segment, and 20% from the Baby Boomer segment. The results of this study are not presented in terms of statistical significance or statistical correlation. Rather, we took a qualitative approach and analyzed the data by comparing percentage differences between segments of the response pool.

It’s important to note that the results of this study represent pattern perceptions among our sample. They don’t necessarily reflect the reality of or predict people’s actual behavior. Regardless, we’re confident that the patterns identified in this study provide useful insights regarding consumer banking perspectives and that they can be used to inform the product, services and marketing strategies of financial institutions and fintechs alike.

Response Pool Demographics and Financial Profile

The response pool, while not a fully representative sample of the U.S. census, offers a spread of perspectives from a variety of demographics. The response pool consisted of 40% Gen Z, 39% Millennial, and 21% Baby Boomer age groups, and respondents were 65% male, 35% female, and 1% self-described gender or nonspecific. Respondents also included people from various regions across the country — 37% from the South, 22% from the West, 22% from the Midwest, and 19% from the Northeast. We also surveyed people from a wide variety of educational backgrounds.

In addition, we asked a number of questions designed to provide a sense of the potential payment habits or the financial vulnerability of respondents. In terms of payment methods used most often, most respondents claim to use debit cards, and slightly less than half of the group claims to use credit cards regularly. Otherwise, money transfer apps and cash are regularly used by roughly one-third of respondents. Relatively few respondents use checks, bank transfers, or cryptocurrency.

When it comes to markers of financial behavior or vulnerability, 83% of respondents aid they had not used a buy-now-pay-later (BNPL) option in the last year, and nearly three-fourths of respondents avoid credit card debt either generally or entirely. In spite of these encouraging patterns, there are, notably, some discouraging patterns as well. For example, almost 1 in 5 Millennials and Gen Z respondents used BNPL in the last year. This correlates with rates of BNPL use among Gen Z and Millennials published by Forbes, where usage among younger generations, in particular, seems to be increasing year to year.

In addition, more than half of the respondents also reported experiencing financial difficulties at least occasionally, with Millenials showing the highest percentages. We also asked how long respondents’ emergency savings would last if they lost access to regular income and discovered that 26% have savings that would last two weeks or less and that only 25% have savings that would last more than six months. There was a 34% subgroup of Baby Boomers that have savings that would last a year or longer.

More than half of the respondents also reported experiencing financial difficulties at least occasionally, with Millennials showing the highest percentages.

Generational Differences in Banking Habits

Banking habits vary by demographic. For example, the survey revealed that Gen Z is far less likely to have a traditional bank account than Millennials or Baby Boomers. Just 47% of Gen Z respondents— versus 75% of Baby Boomers and 70% of Millennials—claimed to have an account with a traditional bank, credit union, neobank or technology company. Baby Boomers, however, were found to be far less likely to utilize mobile banking. Only 28% of Baby Boomer respondents— compared to 73% of Millennials and Gen Z—indicated that they’d used a mobile banking platform in the last three months. Baby Boomers were far more likely to visit a physical branch than Millennials or Gen Z, and they were also more likely to join a bank based on in-person experiences over digital offerings.

Respondent Financial Accounts

Attitudes Toward the Future of Banking, Banking Services and Personal Finances

As for expressed interest in future banking services, at least 57% of each segment indicated that they would like their FI to consider providing advanced identity and credit protection, and nearly half of each segment expressed interest in data protection for digital assets. Security was important to a large subset of the customer/member base. Gen Z and Millennials showed particular interest in FIs providing automated financial guidance or virtual assistants for help in managing their finances.

Though money management services showed markedly less interest from Baby Boomers, 14% still expressed interest in automated financial guidance and 13% expressed interest in a virtual assistant. Overall, each age group felt similarly about the future of banking.

Interestingly, even though Baby Boomers are more likely than other segments to prefer inperson banking interactions at physical branches, 39% still say they believe that there will be far fewer branches in the future. In addition, despite Interest in Future Services from Bank/Credit Union.

Takeaway: As FIs speculate where to invest in future product development, security services are easily the safest bet among both younger and older customers. Money management tools and virtual assistants should be considered as another opportunity worth exploring, particularly for younger-generation customers. their proclivity for online or mobile banking apps, large subgroups of Gen Z and Millennial respondents speculated that branches will survive. However, 20% of both Gen Z and Millennial respondents—and 13% of Baby Boomers—also suggested that banking will be online only.

Interest in Future Services from Banks & Credit Unions

Attitudes Toward Financial Apps

Research showed that most respondents have three or fewer financial apps on their phones, while a surprising number of respondents— mostly Baby Boomers—had no financial apps. Among those that did indicate the use of financial apps, most used apps for banks and credit unions.

It’s clear that Baby Boomers are less likely to use a money transfer or money management app, while Millennials are more likely than other groups to use investment management apps. Among the Baby Boomers that do use financial apps, however, 49% use a money transfer app.

Takeaway: Given the wide use of money transfer apps among Gen Z and Millennial customers and among Baby Boomers who use financial apps, banks and credit unions still have (or may have already lost) a huge opportunity to provide lucrative money transfer services that appeal to a wider customer base. 

Customer Support Preferences

In terms of support preferences, most respondents favored similar support channels. The largest subsets of each group favored live, human-driven support channels. All three groups showed high interest in live human chat, call-center services, and visiting the store or branch — though live chat appeared to be the most broadly desirable channel overall.

Additionally — and unsurprisingly — 53% of Gen Z respondents and 42% of Millennials wanted to be able to find their answer online, while 27% Baby Boomers preferred this channel. Another set of data from our survey helps add additional color to this pattern preference.

When respondents were asked what they found most frustrating in their interactions with digital banking services, a significant number mentioned that if they have a question or run into a snag in their experience, they want to be able to communicate with a person right away in order to resolve their issue. Several also mentioned that chatbots, automated calling systems, or long call-center wait times contribute to their frustration.

Takeaway: Among the support channels FIs or fintechs could offer their customers, live chat is the most likely channel to meet the preferences of the largest number of possible customers across younger and older generations.

Satisfaction and User Experience with Digital Banking

The sentiment expressed by each group regarding their digital banking experience was consistent overall. Approximately 85% of respondents were at least somewhat satisfied with their overall banking services experience, though Baby Boomers were much more likely to be very satisfied. Interestingly, when respondents were asked whether they agree that their primary FI makes doing what they want with their money easy, nearly half of respondents in each group said that they somewhat agree. This same pattern persisted for all three groups when they were asked if their primary FI “offers impressive digital tools and self-service options” and “cares about my needs and provides value.”

In addition, among the tasks respondents might perform using their FI’s digital experience, a few interesting patterns emerged. While respondents across each group felt that banks and credit unions are typically doing well at making it easy for users to access their balance and transaction history and review their spending history, large subsets of respondents across each group (between 20–58%) indicated that they’re not sending money, paying bills, or applying for loans or credit cards via the digital experience offered by their primary FI. On top of this, when it comes to sending money, paying bills, or applying for loans or credit cards via their primary FI’s digital platform, respondents are more likely to imply that doing so was less easy than they would prefer.

Takeaway: FIs are meeting some core expectations for their customer but they may be offering diminished money transfer services, which presents both a significant opportunity and risk in terms of revenue generation and market share.

Top Priorities When Choosing a Financial Service Provider

When choosing a financial service provider, each generation showed less variability in their responses than expected. Nearly half of Gen Z and Millennial respondents indicated that the digital banking experience is very important when they’re choosing a financial service provider, and the majority of all three groups indicated that the digital experience was at least somewhat important. Among the top priorities when choosing a financial service provider, “level of trust and security” was selected by at least 48% of each group.

Among Gen Z and Millenials, “rates, products, services and special offers” was the second-mostimportant category. While Baby Boomers were more likely to prioritize more personalized features—including the ability to talk to a person, the friendliness of the staff, and the closeness of the branch—large subsets of this group also selected the same priorities as the younger groups. Vice versa, large subsets of each of the younger groups also selected priorities that were most important to Baby Boomers.

Takeaway: Regardless of generation, the most important factors affecting how customers choose a financial service provider are (1) trust and security, (2) rates, products, services and special offers, (3) the ability to talk to a person when support is needed, and (4) a great digital experience.

Trust in Financial Institutions

While most respondents from each group indicated that they at least somewhat trust their primary FI regarding their personal financial data, Gen Z and Millennials were less likely than Baby Boomers to completely trust their FIs.

Trust in Primary Financial Service Providers

National banks and credit unions still appear to garner the most trust from each segment compared to other options, though large subsets of each group (an average of 13%) indicate a lack of trust in any FI or fintech with their personal financial data. Interestingly, Gen Z is more likely to trust national banks, while Baby Boomers are more likely to trust local and regional banks. Each of the three groups indicated a lack of trust in tech companies and fintechs—even though it’s clear that many of the respondents regularly use tools that are likely provided by fintechs.

Most Trusted to Securely Manage Personal Financial Data

Despite the apparent mistrust in tech companies and fintechs, 68% of respondents said they were willing to conduct payments through a tech company. Large subsets of each group also indicated a significant level of trust in performing other tasks—such as credit monitoring, investments and money management—through tech companies. Baby Boomers are the least likely group to feel comfortable performing any of those tasks through a tech company, though 41% still indicated that they conduct payments and 28% indicated that they would do credit monitoring through a tech company.

Banking Tasks Comfortable Doing thru Tech Company

Takeaway: FIs are meeting some core expectations for their customers, but they may be offering diminished money transfer services, which presents both a significant opportunity and risk in terms of revenue generation and market share.

Research Conclusion

The insights from our research present FIs and fintechs with a variety of opportunities worth exploring.

  1. First and foremost, though Gen Z, Millennials and Baby Boomers show some differences in their perspectives and preferences, many of their expectations or experiences overlap and highlight the intersectional needs and desires that most consumers share with one another.
  2. Among the many areas to explore, FIs would likely benefit from focusing investment or research around how to better manage their customers’ trust while offering services that improve data and financial security.
  3. In addition, FIs and fintechs should consider whether their support services offer sufficient opportunities for immediate, human help, either human or self-service. FIs also need to be aware that there appear to be gaps in customer satisfaction around the same types of tasks that customers are increasingly using non-FI payment apps to perform.

At MX, we call this holistic approach the money experience and the next part of this guide will walk you through how your organization can create engaging money experiences for customers of all ages and demographics.

Defining the Money Experience

No matter the details of our lives, we all want to improve our relationship with money. We look at the apps that make life easier — from ride sharing to grocery delivery — and we want the same easy, customized experience with our finances.

We all want a better money experience.

For centuries, people had to travel into a bank branch to deal with money, using paper currency in a physical location.

Now banking is an activity that happens dynamically on a smartphone. But banking on a smartphone still isn’t necessarily an ideal experience. To see why, ask yourself how your customers currently interact with their money. Do they have to sign into multiple accounts to get a sense of their complete financial picture? Do they have to wade through indecipherable transaction descriptions every time they want to see their spending? Do they still have to visit a branch for simple transactions?

Put simply, are your customers forced into the chore of managing their money, or are you giving them an experience, backed by automated financial guidance and personalized nudges?

Money management requires customers to go into a branch for simple transactions, track every expense they make, manually categorize their transactions, endlessly tweak their budget, and more. It’s banking of the past, riddled with frustration and disappointment.

The money experience, by contrast, is an easy way to connect, view, and interact with money. Customers can do simple transactions directly on any device (including phone, watch, or whatever’s next), see all their accounts in one place (via whitelisted connections or API connections), enjoy accurate transaction auto-categorization (backed by AI), get personalized guidance around their spending habits (with machine learning), and more.

As Ryan Caldwell, Founder and CEO at MX says, “As people automate everything, they can recover those hours and try to make those hours useful. From a financial perspective, people don't want to have to worry about it. They want to set it and forget it.”

No more management. Instead, it’s an experience.

The benefits of the money experience extend beyond customers to bankers as well. For bankers, the money experience is about having access to clean, dynamic user data as well as options to offer automated personalized nudges. With a 360-degree view of each customer, you can understand what your competitors are doing and adapt accordingly. Just like the experience for your customers, everything is simple and streamlined.

In the end, the true power of the money experience is behind the scenes — built on a foundation of stable connectivity and enhanced data.

Stable Connectivity

As part of our ongoing research about what consumers want from banks and fintech companies, we’ve found high demand for financial aggregation.

Specifically, we asked more than 1,000 random US consumers how valuable it is or would be to see their financial accounts in one app, and we found that 91% said it would be either very valuable (48%) or somewhat valuable (43%).

Simply put, people want the ability to sign into a single place and see everything — checking, savings, car loan, mortgage, 401(k), etc. — in one view. They don’t want to sign into a separate app or account to get a full sense of their finances. And yet we also found via our consumer research that 60% of consumers say they currently don’t have this ability.

Not offering the ability to aggregate data is a major misstep for financial services companies since it means they’re unable to reap a range of benefits we cover throughout this guide.

Connectivity in Context

Connectivity has traditionally relied on screen scraping — the process of gathering data from one app by inputting user credentials (such as username and password) and displaying that data somewhere else.

However, traditional screen scraping is quickly becoming a thing of the past as more organizations shift to whitelisting data aggregators and implementing direct APIs — options that bring added transparency, clear permissioning, and increased security.

The only reason that fintechs screen scrape is because it’s the only path for them to get at that data. Once they have a more reliable, more secure and faster path, I think they’ll abandon it overnight. BRANDON DEWITT CTO and Co-founder at MX

As more financial institutions implement whitelisting and APIs, screen scraping in the traditional sense (where third parties scrape data without permission) will become less widely used. “The only reason that fintechs screen scrape,” says Brandon Dewitt, CTO and Co-founder at MX, “is because it’s the only path for them to get at that data. Once they have a more reliable, more secure and faster path, I think they’ll abandon it overnight.”

This move will also enable increased innovation since customer-permissioned data sharing is often bidirectional (meaning that financial institutions and fintech companies can share and receive data from the sources they connect with via API). Bi-directional sharing sets up all parties involved to use data in creative ways to best serve and advocate for their customers.

In addition, the scope of what’s possible with connectivity has quickly expanded over the past decade as organizations can now leverage more than 50,000 connections to a range of financial institutions, fintech companies, insurance companies, credit card companies, and much more. With so many backup connections available, organizations can offer the ability to re-route deficient connections, making the experience far better even in instances where there’s still no option but traditional screen scraping.

All of this is terrific news for the 91% of consumers who value account aggregation, as well as the financial organizations that offer it.

It also paves the way for Open Finance.

Open Source, Open Finance

Financial institutions have been stuck with legacy systems, vendor lock-in, and a lack of development resources for far too long.

Thankfully, there are an increasing number of options here, including open-source software development kits (SDKs) that give financial institutions the solutions they need to easily transition away from any vendor that doesn’t meet their needs so they can partner with those that do. This open-standard, open-source approach helps put financial services companies at the center of their customers’ money experience.

Best practices on this front include complete client documentation, a legal framework, and premade options for user interfaces, as well as building to the latest FDX specifications and OAuth 2.0 standards.

These practices give customers the ability to see how authorized partners are accessing their data and the ability to revoke access at any time. They also make it easier to securely connect to other apps and enterprise software, enabling a 360-degree view of customer finances, decreasing the burden on IT teams, and improving the money experience for customers. In addition, they help financial services companies enjoy the benefits of modern core systems without prolonged, multi-year migrations that cripple innovation.

Finally, these practices help financial institutions and fintech companies connect their financial systems through open APIs, so they can better understand their customers, innovate faster, and be true advocates for those they serve. It’s no wonder that “90% of bankers believe that open banking will boost organic growth by up to 10%,” according to survey data from Accenture.

Enhanced Data 

Of course, if the data you connect to is disorganized and confusing, connectivity is nearly useless for you and frustrating for your customers. Messy data erodes trust, clogs up your call center with requests for clarity, and burdens your operations teams.

By contrast, enhanced data transaction sets you up for success with whatever technology comes next, whether it be voice assistants, apps on a watch or glasses, chatbots, or the next iteration of virtual reality. In every instance, your customers want to easily and quickly access information about their transactions — something they can’t do if the data they see is indecipherable, such as “OGIV89 --Wal- 987 Visa.” You could offer the most intelligent chatbot in the world, and it wouldn’t be much use to your customers if it fed them data like that.

That’s why enhanced data is such an essential part of the money experience. Data is the oil of the digital age, empowering everything else people do online.

And yet consumers currently feel frustrated by unclear transcription descriptions, with 71% of consumers saying it’s a frustration they feel at least yearly and 17% saying it happens at least once a month.

Frustration over Unclear Bank Transactions

How can you offer an ideal money experience if your customers are consistently frustrated like this?

The answer hinges on your ability to follow best practices around cleansing, categorizing, and augmenting your data. Here are critical questions to ask yourself as you look to offer enhanced data:


  • Do your customers immediately know which vendor a transaction description refers to?
  • Can they see a logo of the vendor to help them quickly make the association between their purchase and the vendor more?
  • Can they visualize the vendors they purchase from in a way that’s simple for them to understand their trends?


  • Do your customers have the ability to see their transactions automatically categorized?
  • If they do, are transactions categorized as “miscellaneous,” or are the categories actually helpful?
  • Can they see their spending patterns by category, and is the process at least 95% accurate?


  • Can you easily tell how much money your customers are sending to your competitors from their accounts with you via bill pay, credit cards, a loan, etc.?
  • Do you give them location data in a way that’s easily accessible?
  • Do they have the ability to see transaction type (bill pay, point of sale, online payment, subscription, etc.)?

Enhancing transactions this way — through cleansing, categorizing, and augmenting — is critical to your future growth. As Ron Shevlin, Managing Director of Fintech Research at Cornerstone Advisors, asks, “If you don't have good data and analytics capabilities, what good will an AIfirst strategy do?” You have to lay the right foundation with data before you start dreaming of an advanced user experience.

In addition, it’s worth noting that a small difference in accuracy can have an enormous impact on the return of investment. For instance, if categorization accuracy rates are 95% and a consumer has 840 transactions per year, then they’ll have 42 indecipherable transactions. If that results in two calls they have to make per year, it’ll cost you roughly $8 per individual annually (at an average cost of $4 per call). That sounds insignificant, but at a scale of 100,000 customers, it can add up to a cost of $840,000 per year. By contrast, having an accuracy rate of 99% cuts that rate dramatically, resulting in a far higher return on investment.

The truth is that enhancing data is not only the right thing to do by your customers. It’s also a sound business investment. As Michelle Evans, Forbes contributor, writes, “The ability to make sense of the avalanche of data will be what distinguishes the winners from the losers in the next decade."

The Money Experience

With a foundation of stable connectivity and enhanced data, the money experience is possible. It comes to life with AI-driven predictive insights and machine learning models. Instead of a chore, money becomes something relevant, intuitive, and engaging. A delightful money experience.

On this note, Amir Hermelin, Vice President, Engineering Product Design and Data at SoFi, talks about the need for “using data, not necessarily just to market and to target, but also to feed that back to the user and show them what has been collected from these different places and give them the best experience.”

MX Chief Customer Officer Nate Gardner dives deeper with this insight, saying, “The mobile experience of using a financial tool should feel equivalent to what Tesla is doing in the auto industry. Instead of just driving you from A to B, it should also watch out for your safety and give you warnings about where to turn and how to avoid accidents.”

People are set up to get this type of experience from their financial institution, given that 51% currently say they use their bank’s mobile app to manage their money — a number far higher than the percentage saying they use an app other than their bank’s app (8%) or paper and pencil (6%).

People are already using their bank app and want to interact with their money there. It’s just a matter of turning the chore of management into an experience where automated guidance — backed by connectivity, data, and AI — gives each customer personalized nudges to keep them on track.

After all, 64% of respondents say that if their bank or credit union offered a new app to help them manage their finances, they’d use it.

Would you use a new app to manage finances?

Imagine how much that number would skyrocket if they were to see that what they had thought of as managing (budget bars, manual categorization, etc.) were actually automated?

It’s all about getting them over the hurdle of trying it out. “Once you [as a consumer] go to mobile banking, you've gotten over that hump of trying it, and you're going to be much more likely to use it,” Dan Latimore, Chief Research Officer at Celent, explains. “It's going to accelerate the declined use of branches.” At that point, traditional financial institutions will start to become indistinguishable from fintech companies like PayPal — unless they lay the right digital foundation now.

“The days of financial institutions just being repositories of assets and sources of credit are gone,” says Jane Barratt, Chief Advocacy Officer at MX. “We have to acknowledge that being able to have what is essentially a commodity product differentiator and being differentiated only by a brand name has transformed completely into, ‘What is the experience that you are giving me?’ and ‘What outcome can you help drive for me?’”

That outcome-centered focus is the heart of the money experience. Every design decision and interaction is about the outcome it produces — all with the end goal of empowering the customer to become financially strong and drive loyalty, engagement, and revenue for the brands that offer the experience.

Banking on the Future

By joining the movement from outdated money management to the money experience, you set yourself up to outcompete other players in the space and win the ongoing loyalty of your customers.