February 9, 2024

How can banks attract young customers? Understanding Gen Z's preferences

Nadia Diakowska in Warsaw, Poland

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Polish Economic Institute presented research that shows the percentage of pupils and students aged 15-29 who combine education with work. In the case of Poland, the result is 12%, while the European average is 23%.

Picture by: Marco Verch

Gen Z, often identified as ‘digital natives’, prioritises “rapid satisfaction” in banking, favouring personal loans among common credit products and valuing the protection of private data.

“At our age, with limited opportunities for high-paying jobs due to full-time studies, loans appear as the only way to pursue an education independently from family support,” Marianna, a 23 year-old medical student from Poland, told Harbingers’ Magazine.

Studies indicate a growing inclination among Gen Z towards online lenders, known for their swift approval processes and same-day money availability.

In particular to this choice, is the approach to student loans.

In Poland, where Marianna studies, university costs are relatively low and student debt is uncommon, unlike other parts of the world where it poses a considerable burden.

For instance, in the UK, almost 1.2 million students have loans totalling nearly £17.9 billion (€20.98 bn), with an average loan value of £15,030 (€17,616) per student. The UK government forecasts the value of outstanding loans to be around £460 billion (€539 bn) by the mid-2040s.

Similarly, Gen Z Americans carry a heavy burden of student loans, with an average debt of $20,900, 13% more than millennials. The median loan value of Gen Z is $12,800, approximately 14% higher than for millennials.

Experts advise banks to focus on developing solutions for student loan refinancing, considering the significant student debt within this demographic.

To foster brand loyalty and increase marketing effectiveness, banks need to reassess their engagement strategies with younger customers.

Gen Z’s unique relationship with data privacy also deserves attention from banks.

“Something as private as my bank balance should only be disposable to me and to whomever I allow. I prefer a bank that is transparent, ensures the safety and responsible sharing so I’ll feel more confident in my choice of service [bank],” shared 20-year-old student Maja Zielinska.

Banks can divulge client data to other companies through the use of Application Programming Interfaces, which allow two providers to pass the information you have given permission to share, such as your bank balance and regular payments.

Amidst the surge of big data and concerns over privacy breaches by large corporations, this issue is gaining increasing prominence.

“Data privacy is the most important factor for me when choosing a bank,” 16-year-old Camilla Savelieva, a contributor to Harbingers’ Magazine, told me.

Experts also foresee a scenario where banks risk losing the trust of Gen Z unless they handle customers’ data according to their preferences.

In addition to addressing data privacy concerns, banks also need to adapt their strategies to attract young clientele.

They could tap into Gen Z’s enthusiasm for cryptocurrencies by offering innovative products and services tailored to their interests and preferences.

By providing user-friendly platforms for buying, selling, and storing digital assets, banks can position themselves as trustworthy institutions within the crypto space.

Nearly 94% of cryptocurrency buyers worldwide are aged between 18 and 40, with Gen Z and millennials making up the majority.

Another survey indicates that the number of cryptocurrency investors from these two generations is three times higher than that of any other generation.

Gen Z has also reportedly expressed optimistic views, at 88%, and high hopes for AI and its uses in the service sector.

“I use AI frequently and it has unquestionably improved my life. I feel fortunate to live in a time when AI can answer all of my questions, no matter how complex,” said Maja Zielinska.

“Implementing AI in customer service would be quick, cost-effective for banks and accessible at all times,” Maja added.

Mateusz, a 19 year-old student from Poland, also shared this view, stating that if banks invested in AI, going to the bank would become “a less time-consuming and tedious task.”

The importance of leveraging AI in the financial industry was similarly voiced by Colin Bell, CEO of HSBC Bank and Jack Hidary, CEO of SandboxAQ during the 2024 World Economic Forum.

“In recent years, AI has started to revolutionise the financial industry in ways we could only have dreamed of in the past. Machine learning algorithms can now analyse vast data sets, providing deeper insights into market trends, risk assessments and customer behaviour.”

Continuing to add how “AI-driven tools provide ultra-secure communication channels, ensuring the confidentiality of sensitive financial information.”

Surveys also found that 72% of Gen Z respondents are more likely to be loyal to a brand that personalised its customer service experience.

“Hyper-personalisation is an effective tool in banking, fostering enjoyment and trust when services align with individual preferences. A bank that prioritises my needs and desires would likely retain my loyalty, than one that treats every customer the same,” claimed Mateusz.

“I subconsciously prefer personalised services and value convenience. Quick and efficient information or services are crucial for my generation,” said Maja Zielinska, underscoring the increasing significance of Gen Z preferences as they enter the workforce.

The young generation also showed never-before-seen collective enthusiasm for investment.

Compared to preceding generations, Gen Z is investing at a younger age and over a larger spectrum of traditional and virtual asset classes.

According to the 2023 survey, almost half of US Gen Z invest in the stock market, making them 45% more likely to start investing by age 21 than Millennials (1980-1995) and two to four times more likely than Gen X (1965-1980) and baby boomers (1946-1964).

Individual stocks and retirement investing accounts appear to be the most common types of investments among Gen Z.

According to NASDAQ, 73% of Gen Z own stocks, 15% of the generation’s investors are using ETFs (exchange-traded funds) , 30% hold bond investments and 22% buy index funds.

“Some of my peers invest in stocks,” said Camilla. “With more knowledge about the market and economics, I’d lean towards stocks over crypto, given its higher risk.”

While most avoid taking chances with investment, some manage to score big in the world of finance.

“I started investing when I turned 18,” said Mateusz. He chose to invest in stocks and bonds, anticipating greater returns compared to traditional savings. A year later, he successfully bought his first apartment. He plans to rent it out to generate income for future real-estate investments.

This early adoption of investing showcases that Gen Z is well-versed in the complexities of investment strategies and eager to secure their financial future.

Written by:


Nadia Diakowska

Economics Correspondent

Warsaw, Poland

Born in 2005, Nadia is a graduate of Stefan Batory High School in Warsaw, currently taking a gap year to complete A-levels.

Her main interests include economics, mathematics and psychology. In the future, Nadia plans to study economics and management in the UK.

Edited by:


Timur Boranbayev

Economics Section Editor

London, United Kingdom


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