57% of banking executives surveyed across the UK say that attracting young consumers is one of the biggest challenges they are facing in the next twelve months. While 67% say it is a vital part of future-proofing their business, with 50% believing it is key to remaining competitive. That is according to new research released by Tink.

This is against a backdrop of high demand from Gen Z consumers for feature-rich banking experiences, with a greater likelihood of switching their loyalty to another provider if they don’t get them.

46% of Gen Z consumers surveyed are already using third-party money management apps in addition to their core bank, indicating that consumers are increasingly turning to other providers to help them understand their finances.

31% of Gen Z said their bank was at risk of losing them as a customer if digital tools and services weren’t upgraded.

Tink’s research found that Gen Z consumers could be lured to a competitor by the offer of tailored support in meeting financial goals (49%) or tools to manage spending (48%).

Gen Z consumers would like to see their primary bank provide more visibility over finances (57%) and help them manage the cost of living (55%). This indicates that tangible support with day-to-day finances is top of mind for Gen Z. 

There was also a recognition by executives surveyed that banks need to up their game to win over younger consumers, with 63% acknowledging that younger generations expect more and new innovative products and services from them. Yet the research found that some banking executives still face challenges with acquiring these customers, which they attributed to Gen Z’s perceived lower tolerance for friction (33%) or poor UX (30%), and preference for challenger banks (32%).  

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As a result of younger consumers’ rising expectations, Tink’s research shows banks want to take action to invest in digital financial management tools as an effective way to attract and retain customers.