Winning and Keeping Gen Z Customers

Gen Z is rapidly reshaping the future of banking, bringing digital-first expectations, evolving loyalty patterns, and a growing reliance on AI-driven financial tools. In this episode we speak with Carrie Stapp, Vice President of Marketing at Primax to explore how banks and credit unions can meet these changing demands—while staying relevant, trusted, and competitive in a fast-moving landscape.

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For more on this topic, don’t miss the ProSight Quick Q&A with Primax President Bill Hampton, where we take a closer look at how Gen Z is reshaping the future of financial services—and what that means for banks and credit unions today.

TRANSCRIPT:

Frank Devlin: Customers who hail from Gen Z, the generation born between 1997 and 2012, are expected to become an increasingly important key to a financial institution’s success. Poised to become the wealthiest and largest generational cohort, their preferences and goals will surely change the industry as they go about making their mark on society.

I’m Frank Devlin, and this is the ProSight Banking Strategies Podcast. We’re here to inform you on the top trends, challenges, and opportunities in banking today. Formed from the merger of BAI and RMA, trusted organizations that have been supporting financial services leaders for more than 100 years. ProSight is a leading non-lobbying connector of people and information, with deep expertise in risk, fraud, compliance, and retail and commercial banking. Our purpose is to empower financial services leaders to strengthen and advance our industry through training and insights, as well as tools and resources like this podcast.

What does it take to earn the loyalty of a generation that grew up amid economic instability, expects everything to work instantly, and isn’t afraid to walk away if it doesn’t? Joining me to discuss how Gen Z is reshaping financial services and what banks and credit unions need to do to stay relevant is Carrie Stapp, vice president of marketing at Primax. Welcome, Carrie.

Carrie Stapp: Thank you for having me.

Devlin: Great to have you, and I was wondering if we could start this very interesting discussion by talking about some Primax research that I noticed, that shows that Gen Z is more likely to switch to a different financial institution, and to have more reasons for doing so. Can you talk about how AI might make customer loyalty even more difficult for banks and credit unions to maintain? And what can be done to counter that phenomenon?

Stapp: The topic of AI and financial services is really getting interesting when we take a look at the younger generations that are digital native. They’ve grown up with the technologies, and all of the at-your-service, in your hand, literally in the palm of your hand, accessibility to purchase everything and research everything. We’ve been taking a really solid look both at these younger generations and the shift in the way that they’re doing things, in addition to the exploration of how AI transforms financial services, and AI really showing up in a lot of different places.

I think one of the biggest ways that it is showing up and why it may be difficult for financial institutions to not recognize it is the role that AI is playing independently with this generation. Meaning, already we see this in our research, we see this in our testimonials of this generation, that they’re on a regular basis using AI for things like financial planning. They’re not necessarily walking into a branch and having someone sit down with them, they’re typing in prompts and saying, here’s my situation, how do I get to my goals? Really taking a look at all of the different ways that AI is popping up.

It’s not just an algorithm that helps us to target an audience better or improve our fraud metrics, there really is an engagement metric to AI and all of the ways that we have the ability to be served up products and solutions in the moment, to be able to do what-if scenario planning, and I think that we’re on the fast track with agentic AI, and all of these things, where I’ll be able to customize my purchasing across the entire, let’s say, web, and then purchase right in moment. What I think really is happening with AI is that the definition of financial services is becoming much more abstract, much more customized to the minds of the consumer, and I think that it’s really important for us to pay attention to what’s going on in all the ways that we can incorporate it into the customer experience.

Devlin: Yeah, it’s interesting what you’re saying, because it sounds like they may also be, because they’re using so much AI, a more informed customer maybe for better or more challenging for banks or credit unions, that that needs to be factored in, and how you communicate and what they expect.

Stapp: Yeah. Been in a lot of rooms with a lot of bankers and they get really nervous when they hear these things, because how do I know what to trust? I have a hard time in the social media land of knowing is this video real or is it AI? This discussion of what to trust and who to trust for my resources I think gets exacerbated in this new world. And so, that sort of leads to the point of what financial institutions can do to counter this phenomenon is not shy away from it, and not scoff at it. Recognize that this is where your audience is, this is where the consumer is, and you can still attach your brand and the brand of financial services to these technologies and to these advancements by bringing them in, and it’s creating a much more responsible, trustworthy alternative to just blindly searching for resources.

And so, I think that by leaning into this phenomenon and by really thinking about how can we adjust them for today’s utilization, but also understanding where the future might be going, through the minds of these younger generations. I think that the role of trusted financial service institutions becomes more important in this world because they’re going to need to know which tools they can trust and which ones they can’t. It’s just a different definition.

Devlin: To your point about meeting Gen Z or any customer where they are, I wanted to ask you as well about social media and meeting Gen Z there, and say you get them there with some sort of content or advertisement, what have you, what approach needs to be taken there to the content or messaging? So, it’s resonating and it’s not being seen as too promotional.

Stapp: The thing that we see with social media, first of all, when we talk about meeting Gen Z where they are, I have kids in this generation, and I know how they work, and I understand their mind. It goes a little bit beyond that. We’re talking about physically being where they are. Because the role that financial services now plays for this digitally native generation is I’m not in this digitally native generation, and I’ve been around community banking for a very long time. And when I first entered into this arena, in this industry, the business model was I had to go to the bank to cash a check, I had to go to the bank to make a loan payment, or mail it into the bank, I had to go there to make transactions.

And so, the bank itself was more the center of my universe. For today’s digitally native generation, that is not the case. They are making transactions online all day long, watching TikTok videos, looking at Instagram Reels, looking at headlines… They’re consuming their news this way, but they’re also purchasing their goods and services this way.

Devlin: Right.

Stapp: And so, the authenticity of being in social media and the opportunity to really show that authenticity is important, and when we talk about authenticity, it’s really about making what it is we do, which is provide financial services a reality in the way that they live in their world today. A very simple example from a non-digitally native generation is even myself, if I am purchasing something online, even if I’m using my digital wallet in store, if I have to re-key in my credit card or debit card information at point of sale, I’m likely to abandon cart. And I’ll go to Amazon, or whatever, and be like, the payment’s just so much easier. And this is all they know. All it is is keying in your credit card, they don’t even understand that, and it’s literally just a barrier.

And so, showing up and the ability to purchase in the moment, the ability to engage them in the moment is really where the challenge becomes, that if you are not there in that moment, then you’re going to “miss the moment.” But you can’t do this through advertising alone, and that’s really where you mentioned content and messaging has to really resonate. The opportunity for the brand of community banks is to really stand out and say, I’m going to teach you something, I’m going to show you something, and help you live your life the way that you want to live it, oh, and then by the way, you have an easy transition to be able to act on what it is you saw. I want to open that account, I want to open that credit card, I want to do that thing. Download your app, whatever it is. And that’s what we’re talking about by being in the moment.

Devlin: And that word that you mentioned, authenticity, I was going for that. It was eluding me, so thank you for using that word, that absolutely describes it in a really great way. So, you’re talking about for Gen Z, you’re saying be where they are, be there at that moment, that makes me think of everything is faster now, payments are faster, transactions are faster, and at ProSight, we’re very invested in helping financial institutions mitigate fraud. But we’re in a world now where things are faster, there’s a bigger surface area for fraud to take hold. How does Gen Z think about fraud? How on guard are they? What are you seeing? Does it affect product demand? Are they very wary of it, or are they just kind of just going in and doing their thing and not thinking about it?

Stapp: It’s a little bit of a mix of both. They’re just much more savvy than other generations at recognizing these scams, first and foremost.

Devlin: Makes sense.

Stapp: The biggest thing I would say is that in their minds, data privacy and security are table stakes, whereas more mature generations may be making decisions based off of which one would be the most secure, and they’re asking questions about that, the younger generations are not so much leaning into that, they’re assuming, they’re making a lot of assumptions.

Devlin: Interesting.

Stapp: But they are very interested in knowing, is this a scam or is it not a scam? So, I think it’s more popping up on the point of sale sites than it is with their financial institutions, which is interesting. They expect that their financial institution is going to provide that level of data protection and security. They don’t know for sure that the site that they’re buying off of is going to send them the product that they think that they’re buying, they look to those financial rails that provide them the most security.

And so, for financial institutions, I think that it’s inherently built in. So, they’re not sitting here worrying about, are you guys going to expose all of my data and do all of those things? I think they know they’re going to be protected there, but I do think that they’re choosing routes that make it easy, the easiest for them above all else, and then they worry about the frauds. It’s different, the best way to state it is it’s really more table stakes versus a decision-maker for them.

Devlin: Right, right. You’re not going to maybe really impress them just by doing that because they’re thinking, I better be getting this protection.

Stapp: Correct. It shouldn’t be a lead marketing message for you because they would be like, are you just now getting up to speed on that? Where you really need to be leading with your brand and your messaging about your technological advancement, how easy you’re making their life, and then have the proof points and be able to service them in the event that they do have fraud.

Devlin: Fraud expectations, that’s a given, but what are they looking for in terms of maybe product demand or how they want to be communicated to? You mentioned a little bit about social media, but I imagine it’s like the quality of the message as well. What are their expectations in terms of the actual products that they’re using day-to-day?

Stapp: Yeah, the interesting thing is they are so much more likely to look to social media for sources of financial information, and so again, we already addressed this topic about the content of social media, and being able to address them not with, hey, look at my product, but showing and demonstrating how the product fits their lifestyle, fits their need. And really everything digital first is super important. They want apps that are easy, they want to be able to move money easily. The payments arena is extremely important because it’s that daily digital engagement that’s allowing them to live their lives.

I live in rural Indiana, and I haven’t really left my house today, but I’ve transacted three or four times from my phone. And so, I think that the ability to transact on a daily basis when and where I want, the ability to move money easily, pay my bills easily is what they’re looking for, and I think those are table stakes. But I think what’s really going to set institutions apart is that what if scenario, that financial planning capability that helps them to see, am I on track with my goals? That I’m going to call it financial wellness, not financial literacy, where I’m helping to educate them, that’s important too, but that’s more of your marketing strategy.

The financial wellness meaning the tools built within your product set that allow them to say, am I on track? Is this the right thing for me to be doing? Where do I have opportunity to improve to meet my goals? What’s a source of challenge for me? If I were to short route it, I would say all things digital first with the ability to move money easily, and financial wellness tools that help them stay on track is their top priority right now.

Devlin: Yeah. I think this was in Primax research that I read and it talked about how Gen Z, even when they’re young, on the younger end, they’re very interested in maybe more than other generations were in really getting that 401(k) or that Roth going.

Stapp: They are.

Devlin: They’re very tuned into, like you’re saying, financial wellness, where am I right now? Where do I want to be in five years? Versus, and I’m sure they’re saving for houses and cars, et cetera, too, but it’s almost more like financial wellness might be more of a concern for them at focus than the big events in life and saving for those.

Stapp: Yeah. The research report that we did, Banking and Focus, really focuses on that, and talks about how this generation isn’t really as built around, they aren’t envisioning their life as much by those big moments in life the way that let’s say my generation did. Well, I’m going to graduate high school, and then I’m going to graduate college, and then I’m going to get married, I’m going to have kids, and then my kids are going to go to college. They’re really looking at it more from a goal-oriented perspective. I want to be able to have this much money, I want to be able to travel, this is the lifestyle that I want to live, and how do I prepare myself with that?

How much is it going to cost? What do I need in order to do that? And then how do I get there in order to accommodate that life? And so, it’s not as much around a structured lifespan as it is an embedded lifestyle in my every single day, if that makes sense.

Devlin: Totally. And it’s interesting though, I’m wondering as they mature and get a bit older, how do you expect the way they’re conducting themselves financially and planning and their aspirations to change, what do you think they’ll value more as they take on bigger financial decisions, maybe start more businesses, that sort of thing?

Stapp: It’s interesting because we’re in the midst right now of doing small business research of this same sort, and trying to understand what business owners are looking at, and it is a little bit different, and we’re trying to look at it from a generational perspective as well. As these generations mature and their financial lives get more complex, and there’s bigger decisions, and more things to figure out, and different lifestyles, and their lifestyle desires change, they are going to be wanting, and they’re citing this to us already, that I want everything to be digital first, but I want that personal attention when I need it. Where the younger generations might be leaning into, let’s say PayPal or Venmo to move money, they’re not going to get any sort of personal attention face-to-face, can you help me with my personal situation in a human to human way?

Devlin: In the few minutes that we have left, if we could broaden it out a little bit. We learned so much about Gen Z from you, I appreciate that. Can we talk about what signals tell you that a bank truly understands its customers regardless of generation? What are some behaviors or experiences, what can banks and credit unions do to show we understand you regardless of your age or that sort of thing?

Stapp: We talk to a lot of banking executives across the country and especially in the community banking space, everybody’s going to say, we know our customers and we know our community, but we ask them, what’s your growth strategy? Where do you intend to grow? Majority of the time are going to lean back to tell us, we’re going to grow our checking portfolio, we’re going to grow our loan portfolio, very rarely are they specifically calling out a demographic, or a geography, or a generation, to say that I’m really going to tailor what it is I’m doing or create my strategic plan to meet the needs of the consumers that I’m serving. A lot of times it’s from the inside out versus the outside in. And so, for us, for me, when I’m talking with financial institutions, that’s really one of the first signal that they haven’t really leaned in to understand, not only their current customer base, but who it is that they are trying to attract that’s included in their growth strategy.

And so, what I would say is that a bank really needs to go to another level at personifying who it is they already serve, why they’re being served by them, meaning what is it about our institution that’s driving loyalty for this? Is it because we’re the only bank in the community? Is it because we have great digital service? What is it? And then who is it that we have an opportunity to grow with, and what research can we find or do ourselves to find out how they want to live their lives today and into the future, and deploy products and solutions that meet those needs, and market to them with that value in mind, the value that solves their lifestyle challenges, not that just touts the benefits of the financial institution.

And so, for me, that’s a really strong signal if they’re able to do that really well, that they truly understand their customers, and they’re building their growth model, and their business model to serve those needs instead of trying to fit a square peg into a round hole, of, well, this is our business model and we’re going to hope you choose us.

Devlin: I was wondering if we could take a big picture look for this final question. It seems like what we’re talking a lot about today is change. So, generational changes, changes in technology, how do we keep up? So, in your opinion, how can banks ensure that their long-term strategies remain aligned with rapidly changing customer expectations that are probably going to keep changing faster from here on in?

Stapp: I think first and foremost, we need to lean into some of these popular definitions that we use sort of generically, things like personalization, things like embedded, those types of terms, and say, how have those terms really evolved for the future generations? What does the term embedded mean now? What does the term personalized mean now? And are we able to meet that? I do feel like financial institutions, if they haven’t already, they really need to be looking at that daily digital engagement, and figuring out how am I going to make sure that I am the financial institution that has the daily engagement of the consumer, a payments-first strategy, are apps being utilized? That they’re relying on us for their daily lifestyle. And then really taking a look at digital engagement as a holistic journey.

They’re logging into our app, and they’re paying their bills, but how does that marry over to how they’re going to experience us in TikTok, or in our chats, or when they come into the branch? What is that holistic journey that we want our customer to experience thinking about digital engagement being at the forefront? And then once that’s defined, really aligning the entire organization around that view. And so, not taking a look at this and saying, well, this is marketing’s problem, or this is product management’s problem, it’s everybody’s problem, right? It’s the fraud department’s problem, it’s loan processing’s problem, it’s human resources’ problem because we attract talent in this exact same way. And so, really aligning your entire organization around what this focus and your strategic growth objectives are makes the experience that you’re trying to bring to life much more authentic and much more real.

Devlin: Interesting conversation. Thanks so much, Carrie, really appreciate it. There’s a lot to think about and learn from here. So, thanks for spending time with us today. I’m Frank Devlin, senior editor at ProSight Financial Association. To our listeners, thanks for spending your available time with us. If you liked it, please spread the word.

The views expressed by the speakers are the speakers’ own and do not reflect the views of ProSight Financial Association, BAI, or RMA. The views expressed and information shared are of a general nature and are not intended to address the circumstances of any particular individual or entity. No one should act upon any such views or information shared during this podcast without appropriate professional advice after a thorough examination of the particular situation.