Gen Z is reshaping the workforce and redefining financial behaviours. As of 2024, this generation is poised to surpass Baby Boomers in workforce size and will make up 30% of the workforce by 2030. This rapid growth presents a golden opportunity for retail banks to tap into a younger, digitally native audience with distinct spending habits and financial needs.
Unlike previous generations, Gen Z’s economic journey has been shaped by inflation, delayed career starts due to the pandemic and skyrocketing living costs. These factors have made them highly dependent on credit, with Gen Zers being 23% more likely to own a credit card than Millennials at the same age, and carrying an average of $1,126 more in balances. Retail banks need to recognise this generation’s unique relationship with credit – and their dissatisfaction with
Go deeper with GlobalData
Bridging the rewards gap
Gen Z is drawn to credit card rewards but finds many current offerings irrelevant or unattainable. While 94% of Gen Z consumers are eager to earn reward points, 41% report dissatisfaction with existing programmes, and 43% are highly likely to switch to cards that better meet their preferences. Traditional cash-back rewards, while popular across other generations, hold less appeal for Gen Z, as these programmes often require high spending to deliver meaningful benefits – something a younger generation with limited income simply cannot achieve.
Instead, Gen Z gravitates toward rewards that align with their lifestyles. Subscription or membership rewards resonate with 24% of Gen Z consumers, nearly triple the interest shown by Boomers. Digital-focused offerings like free shipping, streaming service discounts or partnerships with tech-forward brands could be game-changers for banks looking to engage this audience.
Digital-first marketing: Where Gen Z Lives
To reach Gen Z effectively, retail banks must embrace their digital behaviours. Nearly half of Gen Z consumers watch video streaming services daily, making them 8% more likely than the general population to consume digital video. Their media consumption splits evenly between connected TV (CTV) and traditional digital platforms like YouTube, social media and mobile video.
This means a balanced media plan leveraging both CTV and non-TV digital video is essential. Gen Z’s propensity to skip ads demands creative strategies, such as engaging, non-skippable formats or gamified advertising experiences.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataRethinking credit card strategies
Gen Z’s spending patterns reveal another opportunity. 80% of this cohort is actively working to build credit, despite the challenges posed by inflation and limited income. Retail banks could attract these customers by offering programmes that reward financial responsibility, such as increased rewards for on-time payments or incentives tied to credit score improvements.
This generation also uses credit cards more for everyday purchases than for significant expenses like personal or student loans. A card designed around frequent, smaller transactions, coupled with flexible rewards tailored to their spending, could prove highly appealing.
The bottom line
Gen Z is a growing, influential audience that requires a fresh approach from retail banks. Traditional rewards programmes and media strategies won’t resonate with a generation defined by digital habits, financial challenges, and a drive to build credit early. Embrace tailored rewards, innovative targeting and digital-first marketing strategies, to capture the loyalty of this untapped market and establish lasting relationships with a generation shaping the future of finance.
Zachary Johnson is Specialist, Campaign Execution & Strategy – Financial Services at VDX.tv
