Business
August 26, 2022
August 26, 2022

Why Retail Banks Should Take a Second Look at Gen Z

Gen Zers are just getting started on their financial journey and it’s more important than ever that banks engage and grow with their next wave of customers.
2020, perhaps more than any year in recent memory, has challenged marketers to rethink the ways that they plan, operate, and budget. In a changing economy, there’s increased pressure to justify marketing decisions by showing immediate return on spend. For retail banks, this mandate may shift marketer’s attention towards customers that are further along in their financial journey. 
In a recent study, we surveyed Gen Z Snapchatters to learn more about how they’re thinking about savings and banking. Our findings highlight why retail banks that continue to invest in this important generation will win in both the short and long term.
Gen Z are building their financial foundation
GenZers are going through a major period of change. Whether it’s graduation, buying a first car, or starting a career, many of the moments during the transition to adulthood will have a lasting impact on their financial well-being.
Encouragingly, many signs indicate that GenZers are rising to the challenge, even in the face of an uncertain financial future.
According to our study, Gen Z Snapchatters are 47% more likely to put more than 10% of their earnings away when compared to Snapchatters in older age groups.2
While saving regularly is a key starting point, there are further signs that this generation is taking control of their finances at an early age.
As Gen Zers are establishing their approach to banking and financial management, it’s important that retail banks consider that their needs may look very different from more established customers.
Digital-first means deeper engagement
As more Gen Zers are taking an active role in their finances, the ways that they engage with their financial institutions are becoming clearer. Known to be digital natives, Gen Z are more than comfortable managing their finances online, particularly on their phones. 
The COVID-19 pandemic has only accelerated the push towards digital. As of October 2020, more than 39%7  of US Gen Z Snapchatters expect to use mobile banking more in the next month and 33%8  expect to increase their use of peer-to-peer payment. 
On-the-go, 24-7 access means that this generation will have more touch points with their bank than ever before. Snapchatters who use digital-only banks are more than two times more likely to interact with their bank on a daily basis when compared to those who use a bank with a brick-and-mortar presence.9
This shift in interaction, coupled with a growing marketplace of mobile financial solutions, make it critical that retail banks build seamless digital experiences that simplify banking and financial management for their customers. 
Creating best-in-class digital products isn’t just important for existing customers. Retail banks can use differentiated digital offerings as a vehicle for growth, particularly with Gen Z. The number one reason that Gen Z Snapchatters chose to bank with a digital-only provider was a perception that they’re accessible and easy to use.10 
Starting the conversation early
Acquiring a new customer is a challenge regardless of who that customer is, especially in banking. Across age groups, most people tend to have a positive view of their current bank.
This sentiment underscores the hurdles that banks face in attempting to convince a satisfied or loyal customer to make a change. This may become increasingly difficult over time as people’s relationship with their bank grows, placing even more importance on winning with younger customers.
When it comes to acquisition, brand building is a big part of the equation for Gen Z. Among US Gen Z Snapchatters who signed up for a checking and savings account within the last year, 42% stated that brand recognition and trust was a primary factor. This is 59% higher than older Snapchatters.15
Conclusions
Gen Z are at the starting point of a long financial journey and it’s one that they’re taking seriously. They’re beginning to save, invest, and will face important decisions that will shape their financial future. Retail banks have a major opportunity to grow with this generation by:





























Snapchat can help your business grow.

1Snap Inc. internal data Q3 2020. Percentages calculated by dividing addressable reach by relevant census figures.
2Snap Inc. survey of US Snapchat users aged 18+ July 12 - 17, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “On average, how much do you put into savings per paycheck?” 1,098 respondents.
3Snap Inc. survey of US Snapchat users aged 18+ July 12 - 17, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “When, if ever, did you first start investing your personal money?” 751 respondents.
4Snap Inc. survey of US Snapchat users aged 18+ June 12 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “Which of the following types of savings and investments do you currently have?” 621 respondents.
5Snap Inc. survey of US Snapchat users aged 18+ July 12 - 17, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “What are your biggest barriers to consistently saving or saving more?” 929 respondents.
6Snap Inc. survey of US Snapchat users aged 18+ June 12 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “Do you manage your personal finance on your mobile device?" 639 respondents.
7Snap Inc. survey of US Snapchat users aged 18+ October 1 - 5, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “Do you plan to use mobile banking more or less in the next month?" 608 respondents.
8Snap Inc. survey of US Snapchat users October aged 18+ 1 - 5, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “Do you expect to use peer-to-peer payment (e.g. Venmo, Cash App) more or less in the next month?" 562 respondents.
9Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “On average, how often do you interact with your bank (branch visit, website, customer service, etc.)?” 795 digital users; 807 non-digital users.
10Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “What, if any, was a reason that you decided to use a digital only bank?” 1,043 respondents.
11Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “What features would you like to see when you first open your bank’s mobile app?” 823 respondents
12Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “What is your overall opinion of your current bank?” 1,561 respondents
13Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “How likely are you to recommend your current bank to a friend or family member?” 1,555 respondents
14Snap Inc. survey of US Snapchat users aged 18+ July 11 - 15, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “How likely are you to switch banks in the next 6-12 months?” 1,557 respondents
15Snap Inc. survey of US Snapchat users aged 18+ August 8 - 13, 2020. Age and location data subject to restrictions. See https://businesshelp.snapchat.com/en-US/a/audience-size-tool for details. Question: “What were your primary reasons for signing up for a new checking or savings account?” 197 respondents