A new wave of financial engagement is emerging among zillennials — those straddling the line between Generation Z and younger millennials. This microgeneration, currently ranging from their late 20s to early 30s, is prompting a major change in banking habits, primarily through mobile technology, while still maintaining ties to traditional financial institutions.
A PYMNTS Intelligence Report, How Zillennials Are Driving Innovation in Financial Services, reveals how zillennials are redefining their financial lifestyles through diverse income sources and a broad spectrum of financial services.
As zillennials progress through pivotal life stages, their financial landscape is marked by a variety of income streams. According to the report, 68% of zillennials earn a salary while 22% supplement their income through freelance and gig work. This dual-income approach enables 77% of them to save money in the past month, a notable achievement compared to older generations. But they also carry significant debt burdens, with 27% holding student loans and 41% having outstanding credit card balances.
Interestingly, zillennials are less likely to use credit card installments compared to other age groups, suggesting that many opt for Buy Now, Pay Later (BNPL) services to manage their finances. This reliance on BNPL reflects their ongoing challenges in cash flow management.
Zillennials’ approach to banking is marked by a wide engagement with multiple financial institutions. On average, they manage nine different accounts, the highest among all generational cohorts. This includes not just traditional accounts, but also digital wallets, BNPL services and cryptocurrency accounts. Their financial behavior indicates a high level of activity, with zillennials engaging in four out of seven proposed financial activities over the past month — more than any other generation.
When selecting financial institutions, zillennials prioritize technology and digital experience over traditional factors like convenience. Only 22% consider accessibility important, compared to 32% of baby boomers and seniors. This highlights a significant generational divide in how consumers evaluate banking options. Nearly one-third of zillennials cite technology and customer support as critical factors in choosing a financial institution, underscoring their preference for a seamless digital experience.
Despite their reputation as digital natives, zillennials still rely heavily on traditional banks. They are 23% more likely than the average consumer to use national banks as their primary financial institutions. Only 16% of zillennials opt for digital-only banks, a figure that mirrors their Gen Z and millennial peers but remains higher than the general sample average of 11%. This trend suggests that while zillennials appreciate mobile banking features, they are not abandoning traditional banks altogether.
Mobile banking is the preferred method for accessing financial services, with 66% of zillennials primarily using this channel — 47% more than the average consumer. Moreover, 22% of zillennials report not having visited a physical branch or ATM in the past year, revealing a notable trend digital interactions.
Zillennials are eager to improve their banking experience, showing a clear demand for features like live support and budgeting tools that they consider vital for managing their finances effectively. This emphasis on enhanced digital offerings signals that financial institutions need to focus on this demographic or risk losing them to competitors that can meet these expectations.
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