Banking Differences Across Generations: A Quick Guide

For the past 131 years, Pepsi and Coca-Cola have been vying for the top spot among soda drinkers. Created in 1886 and 1893, respectively, the two cola beverages have consistently tried to convince soda drinkers that they are each the better choice. In 1975, Pepsi launched what it called the Pepsi Challenge, a blind taste test where consumers sampled both beverages without knowing which they were drinking and chose their favorite. Pepsi was able to significantly boost its popularity. Despite Coca-Cola’s longtime hold on the market, absent recognizable branding and preconception, the majority of taste testers chose Pepsi over Coke — so much so that the latter actually altered its recipe.Fortunately for the banking industry, identifying individuals from different generations is significantly easier. Where it can get trickier is recognizing the differing preferences that tend to pervade within each generation. Key DifferencesRegardless of age, race, or generation, everyone shares the same goal: financial security. The ways that people within each generation approach their finances, however, can be drastically different. Just as there are clear-cut differentiators that determine the generations (Baby Boomers were born between 1946 and 1964; Gen X was born between 1965 and 1980; Millennials were born between 1981 and 1996; Gen Z encompasses anyone born between 1997 and 2012), the 2024 Bank of America Private Bank Study of Wealthy Americans found that there are distinct differences in the way that people within each generation approach investing and banking. Baby Boomers: Not surprisingly, age is a major factor in the approach to saving and investing. Baby Boomers, many of whom have already retired or are gearing up to do so, have worked for decades and have had time to amass more substantial savings than members of younger generations. As such, 86.3% feel they are financially responsible, yet 37.5% of them still don’t feel financially secure. People within this demographic also monitor their bank accounts less frequently, with only 39.3% checking them at least once a day. When it comes to financial advice, Boomers are the most likely to turn to financial advisors (roughly 50%), with only 9.1% likely to trust information and advice provided on social media.  Generation X: While retirement is getting closer for Gen X, most people within this demographic are still at least a decade from retiring, with the youngest of the group reaching full retirement age in the 2040s. Bank of America found that Gen X feels the most financially insecure of any generation. Even though this group has the highest ownership of Roth IRAs, high-yield savings accounts, and 401(k) plans, 50.2% feel financially insecure. Gen X are the most inactive savers, saving an average of $400.60 per month. They are also more active mobile banking users, with 49.9% checking their accounts at least once a day. Though a bit more accepting of social media than Boomers, only 19.1% of Gen X trust financial advice from social media, yet only 22.2% turn to financial advisors for guidance. Millennials: Having grown up amidst events such as the 9/11 terrorist attacks and the 2008 credit crisis, as well as entering the work world at the height of a recession when employment was difficult to come by, Millennials’ attitudes toward money and investing have been heavily influenced by these experiences. Millennials are higher users of retirement accounts and are the most active savers of all generations (saving an average of $535.50 per month), yet 42.9% feel financially insecure. This generation is also more involved with and reliant on social media and technology, with 35.7% trusting financial advice they find on social media and 58.2% checking their bank accounts at least once each day. In the event of a financial emergency, they are more likely to rely on a credit card instead of turning to friends and family for assistance.Generation Z: Members of this generation have never known a world without smartphones, social media, and apps. They have always known the convenience of high-bandwidth cellular service and Wi-Fi and are heavily connected to the internet. While 35.2% of Gen Z trusts financial advice from social media, they are more likely to turn to family and friends for financial help over using a credit card. They are the second most active savers, saving an average of $489.20 per month. Other Notable FindingsWhile it is important for financial institutions to keep the unique behaviors and trends within specific demographic groups in mind when marketing to these individuals and tailoring products and services to their needs, there are also other key behaviors across the generations that should be noted.The following are a few key differences and similarities financial institutions should remain aware of when reaching out to potential or existing customers within all these groups:

As your organization seeks to provide the optimal customer service experience to customers to strengthen loyalty among existing customers and attract new ones, keeping the above information in mind when tailoring products and services to specific demographic groups is important. While everyone wants financial security, differences in generational experiences and preferences are important and can determine the receptivity your institution will receive to specific marketing strategies, as well as products and offerings.