How Gen-Z is transforming fintech

How neobank UX/UI is at the forefront of this trend  

Gen-Z is a big deal. In the past, its members have been overlooked, often labeled as “snowflakes,” and not sufficiently distinguished from the Millennial generation that came before them. However, as they begin to step into adulthood, this generation is proving that they are a force to be reckoned with.

Their unique preferences are prompting a complete rethinking of financial applications—what they offer, and how they should look and feel. As Peter Snasdell, Senior Vice President at Devexperts, observes, Gen-Z’s influence is truly reshaping the fintech landscape.

The stats at a glance  

Gen-Z, which includes all those born between 1997 and 2012, now make up the largest percentage of the global population (estimates range between 25-32%). Back in 2019, they surpassed Millennials as the largest generation in history.   

While not having come into their peak employment years as of yet, they’re expected to account for around 30% of the global workforce by 2030. In the next decade or so, Gen-Z is also expected to become the largest consumer demographic in history.  

This generation started investing earlier than all the other generations. Charles Schwab’s 2024 Modern Wealth Survey showed that Zoomers started investing on average at 19, whereas the US average across the generations is 30.   

Gen-Z investors are also far more likely to crowdsource their investment ideas via social media, rather than consulting financial professionals.

The CFA Institute’s Gen-Z and Investing survey showed that the majority (48%) referred to social media and Internet searches for these requirements, with YouTube ranking highest.

Financial apps came in at 37%, just below parents/family at 45%, and friends at 40%, while financial professionals, surprisingly, shared the bottom position with influencers/pundits at 30%.  

Perhaps the lack of interaction with financial professionals could be due to their relative youth and current lack of wealth. However, an extensive Gen-Z survey published by Oliver Wyman Forum in 2023 showed that even high-earning US Gen-Zers were 3.6 times less likely than other cohorts to employ the services of a financial advisor.

The same trend was shown to hold true for the UK, where only 6% of high-earning Zoomers employed such services as compared with 17% from other generations.   

All-inclusive personalization  

Neobanks, zero-commission brokers, and wealth management apps have approached the design of their products with Gen-Z (and younger Millennial) preferences firmly in mind.

Even the way that the above three lines of business have effectively merged in recent years to offer each other’s services appeals to these younger cohorts. They prefer an all-inclusive interface that serves as a comprehensive financial dashboard, rather than having their wealth fragmented across their home screens.  

This generation values transparency, accessibility, and the democratization of information. They want a personalized experience, but they don’t want to go on a treasure hunt to find it. They also don’t want to be the sole user among their peer group, they want this personalization to be available to everyone.

This is a quality that Gen-Z shares with Millennials, who were the first generation to embody the idea of network effects, and the first group of customers that neobanks converted en masse.  

This preference among younger consumers has been regarded as a clear dividing line between Gen-X (those born between 1965 and 1980) and the Millennial and Gen-Z generations that followed them.

Demographer Neil Howe was one of the first to draw attention to this difference, explaining how Gen-X love “corner solutions” rather than following the crowd, whereas with Millennials: “You offer 35 different plans to Millennials, and [they] feel betrayed, they’re disappointed…Why?… because you know which one’s best, you just won’t tell me.”  

Initially, neobanks attracted users by allowing free instant transfers, currency conversions, and virtual cards for online purcahses.

A group of friends sharing a meal could all be banking with completely different brick and mortar institutions, but use the same neobank to split the bill between them.

Eventually the ease of use of these services led to them being used for most day-to-day transactions, regardless of which bank the user received their wages in.  

It’s all in the UI  

Neobanks have been extremely successful at capitalizing on this notion of the “everything app,” which is universally accessible while also offering a rich user experience that’s extremely personalized.  

By offering the ability to easily sign up for an account that provides access to a variety of financial services such as debit/credit cards, saving accounts, trading, and wealth management features, neobanks have facilitated Gen-Z’s initiation into the world of investments.

Through their highly user-friendly interfaces they’re able to offer low-to-no-cost financial services such as zero-commission brokerage and secured credit cards that help young people improve their creditworthiness.   

By simplifying access neobanks have been able to pre-empt the peak earning and spending years of both Millennials and Gen-Z, before they ever have to consider wealth managers, and other types of financial advisors.

Just as they disrupted online banking a decade or so ago, now they’re moving to initiate the same kind of disruption in the respective trading and asset management spaces.  

In the early 2000s, trading businesses making a bid for the retail dollars of Gen-X customers attempted to make their platforms appear as complex and “professional” as possible.

Their complicated UIs appealed to the exclusive mindset of this generation, which regarded trading as an elite activity being offered to a wider, though still elite, group of people.  

If you observe the trading services that neobanks now offer to Millennial and Gen-Z traders, gone are the Wall Street affectations and appeals to complexity. Interfaces are streamlined, and access to markets is available at a few taps of the screen.

Even the notion of charting as a practice is being thrown into question with robo-advisors and AI assistants perhaps more likely to become this generation’s primary method of accessing markets and entering orders rather than candlestick charts.  

AI-assisted UX at scale  

Following on from robo-advisors and AI assistants, we see that younger Millennials and Gen-Z find themselves at an important juncture in history. AI has reached a stage of maturity where it can be leveraged to tap into the generational preferences discussed above and offer enhanced user experiences at scale.  

The cutting edge of these features is AI-assisted predictive UX, offering previously unimaginable levels of personalization.

A 2024 academic study of AI-driven design in fintech singled out digital banking apps as leading the way in the implementation of AI-driven UX/UI design in fintech.

These applications use AI to “tailor user interfaces based on individual preferences and behaviors. This approach manifests in dynamic dashboards, personalized product recommendations, and adaptive content delivery.” 

Using machine learning algorithms to analyze user behavior and predict their requirements, these systems are able to tailor the user interface according to user preferences, pre-empt customer service interactions, provide timely reminders of upcoming direct debits, make trading and investment recommendations according to prior activity, and offer tailored content.   

Conclusion  

As Gen-Z grows into its peak earning years and artificial intelligence continues to evolve and increase in power, fintech firms that want to remain prominent in the coming decades will increasingly seek that holy grail of the everything app that’s capable of being all things to all people while offering a truly tailored experience at scale.  

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