How Gen Z is inspiring a reinvention of banking

As Gen Zers come of age, they are already reshaping the worlds of work, tech and culture. Now they’re poised to redefine how we think about money. 

“Born into the digital age, they’re changing financial norms and expectations,” says Bunita Sawhney, Mastercard’s chief consumer product officer. “They want their financial life at their fingertips.”

Their jobs, spending behaviors, financial anxieties and expectations for digital experiences are different from previous generations. For example, a new study by Mastercard showed that Gen Z consumers are almost 2.5 times as likely as baby boomers to say they want a speedy online purchase journey. This means building new financial tools that make sense for them.

For Mastercard, Sawhney says, this means creating new capabilities, from customizable checkout to smoother subscription experiences to smarter ways to track spending and build credit. “Meeting the needs of these digital natives will benefit everyone in the end,” she says.

Generation Z — comprising ages 13 to 28 — is the largest generation on earth, with spending power expected to grow to $12 trillion by 2030, according to a report last year by NielsenIQ, GfK and World Data Lab. They also spend more per capita than any other generation had at the same age, making their loyalty key to retailers, brands and banks. So how can you reach them — and how can you keep them?

Personalization pops 

This cohort is coming of age in a world of bespoke vitamin blends, suits tailored via 3D scan, algorithmically optimized workouts and recommendation engines so uncanny you’d think they had a direct line into your brain. But customization doesn’t end at checkout. 

Passion cards with exclusive perks linked to a cardholder’s affinities — sports teams or charities, for example — have been around for decades. Today, the growth of digital-first cards has sparked new creative opportunities, like a card personalization tool in which card issuers can offer a curated set of animated images that allow for self-expression.

These animations connect with consumer passions — say, a signature kick by a soccer legend — building an appeal that goes beyond function to drive engagement at a deeper level.

Spending insights can also power personalized rewards: A new credit card launched by CIBC in Canada with Mastercard automatically determines a cardholder’s top three spend categories each month and rewards them with 50% more points in those categories. 

Mastercard research found that Gen Z consumers see personalization as significantly more important than it is for the average consumer. Those insights drove the development of Mastercard’s One Credential, announced in February, which gives consumers the option of using a single credential tied to multiple payment methods — debit, credit, prepaid, installments and more. 

Rather than carry multiple cards, you can pre-set or switch payment methods online, and all of your payments are automatically tailored to your preferences. Everyday expenses like groceries might be deducted from your checking account, while a larger splurge may be spaced out through installments — one digital key to unlock many ways to pay. 

“This is especially powerful for younger consumers, who primarily use debit, as it offers them a path to building healthy credit habits and creditworthiness, and all with the seamless digital experience they crave,” Sawhney says. 

These personalized payment capabilities could be enhanced even more, thanks to Mastercard’s new Agent Pay service, in which shoppers use Agentic Tokens that lets AI agents to make secure and transparent purchases on their behalf. For example, someone planning their 30th birthday can chat with an agent to curate her outfits and accessories based on her style, the venue’s ambience and weather forecasts. The intelligent agent goes further by taking the user’s feedback to make the purchase, as well as recommending the best way to pay.

A responsible approach to credit

Gen Zers are worried about money, are serious about preparing for their future and seek information on managing finances early, research shows. They are more likely than previous generations to educate themselves on financial matters, including student loans, before incurring debt: In a 2023 Mastercard study, 73% of teens said they wanted more personal finance education, perhaps because 52% worry about financial security and stability — more than double older generations. 

Debit is their payment method of choice for everyday items — these transactions are simple and reliable, giving them transparency and control over their expenses. Debit is also preferred because much of Gen Z hasn’t yet established credit, and that lack of credit limits their access to higher-tier cards that offer more meaningful rewards and benefits.

With that in mind, Mastercard convened technology partners to find new and flexible ways for banks to help this enormous generation build credit and keep them as customers for the long term.

Consumers are looking for capabilities beyond easy cancellation — they want the ability to upgrade, downgrade, pause or tailor services instantly based on changing needs. Research by Minna Technologies, the subscription management service for banks that Mastercard acquired last year, highlights this shift: 86% of consumers would consider accepting an offer rather than cancel a subscription outright, and 80% prefer adjusting plans over cutting them off completely.

And Mastercard’s own research found that more than half of consumers surveyed would switch banks for better subscription management capabilities — a statistic that Melanie Fuller, Mastercard’s senior vice president of product for experience and disputes, calls “stunning.”

“In a world where bank loyalty is hard-won, few things move the needle — but the promise of effortless subscription control is proving powerful enough to make customers of all ages walk away from their bank and into the arms of one that gets it,” she says.

The personalization that Gen Z finds so appealing has applications in this space, says Minna CEO Navpreet Randhawa. Say you binged a show on a streaming service and then canceled it. Now a new season is airing. “Let’s help you get that back,” Randhawa says. “We want to enhance the customer experience and bring products to you that are useful to you.”

Gen Z is setting new expectations for trust, access and empowerment for everyone, Sawhney says. “The future of finance belongs to those who listen, evolve and build with this generation, not just for them.”