While younger generations gravitate towards fintech brands and digital-only banking solutions, significant opportunity still exists for community banks marketing to Millennials and Gen Z.

Yes, the next generation of depositors take a different approach to banking than their parents. And they certainly stray away from traditional banking norms in many ways. But they’re also growing up, facing fresh life challenges, and entering the prime earning years of their careers.

Here’s how community banks can compete effectively with digital-first alternatives and win over Millennial and Gen Z customers.

Millennial Banking Habits are Driven by a New Set of Priorities

With the right engagement strategy, community banks can be the go-to source for Millennial and Gen Z customers balancing major financial decisions like buying a home, starting families, or launching businesses. Especially when both generations are the most likely to switch financial institutions or open a new account for the right offer.

But there’s more to understanding Millennial banking habits than delivering digital convenience or a compelling incentive. Community banks must do a better job of understanding their unique values, financial priorities, and the economic realities that shape the next generation of banking decisions.

The Banking Mindset of Younger Generations

Millennial banking habits are tech driven, but surprisingly, their values are more traditional than you might think.

• Customer surveys indicate that the number one driver of banking satisfaction remains customer service, trust, and responsive support
• Community banks have a marketing edge in this arena, as even younger generations equate in-person, human interactions with customer service
• Even those who rarely choose to engage with in-person support are influenced by the concept

That doesn’t mean you can sidestep the tech issue. Quite the opposite. It’s that a seamless digital experience is no longer a selling point, it’s an expectation. You won’t impress Millennials and Gen Z with cutting-edge digital interfaces, you’ll just lose them immediately if you don’t have them.

Provide the tech. Focus brand messaging on service and support.

What They Hate Matters as Much as What They Love

No generation likes hidden fees or junk fees, but unlike older customers who begrudgingly tolerate them, younger generations are highly resistant to fees. The aversion is so strong that a single “unfair” fee can lead to account closure and “no fees” messaging is all but a must on some level when marketing to Millennials.

This point is particularly poignant when you consider that large fintech companies regularly cite online-only banking as a core driver of what makes fee-free banking possible. Community banks must combat this misconception as younger depositors may incorrectly presume that physical branch = more expensive.

A Generation of Switchers, for Better and for Worse

Both Gen Z and Millennial banking habits are driven by incentives, sign-up bonuses, and enhanced rewards. It’s easy to convince younger customers to switch banks, open new accounts, or refinance loans. You just need to provide a strong enough offer.

But acquiring customers by gifting monetary value is expensive. Especially if this demographic is likely to jump at the next available bonus.

Having a long-term retention strategy is key:

• Bundle incentives to encourage customers to open multiple accounts simultaneously
• Build deeper relationships that deliver long-term planning and support
• Provide ongoing financial education in the form of workshops, webinars, and interactive tools

When it comes to financial literacy, younger generations tend to fit into one of two buckets. They’re either highly advanced and capable of managing their own investment portfolios or woefully behind. This second group represents an incredible opportunity for community banks who can provide education and ongoing guidance.

The question is, “How can community banks present themselves to younger generations as financial knowledge centers?”

Reimagining Brick & Mortar Banks as Financial Education Hubs

Community banks must reframe the value of the physical branch.

Today, most consumers see the physical branch as a relic. A place old people go to make deposits and withdrawals. To complete transactions.

By shifting this narrative to present in-person banks as financial knowledge centers, community banks can deliver something no online-only solution can: multi-channel financial education and advisory.

A dual-channel strategy means:

• Highlighting digital wellness tools such as budgeting apps, automated savings features, or credit score tracking
• Using branches as community education hubs with classes on budgeting, debt management, and first-time homebuying
• Promoting savings products to match the most sought-after financial education topics
• Mobile-first banking with intuitive navigation, strong security, and real-time communication
• Seamless, fast account opening processes

Empower the next generation of depositors to bank how they want to while encouraging in-branch engagement by revolutionizing what in-branch engagement looks like.

Developing Your Gen Z and Millennial Marketing Strategy

Millennials and Gen Z represent both a tremendous growth opportunity and a retention challenge for community banks. They will switch for better incentives, lower costs, or superior service. But they will also reward institutions that provide ongoing value, education, and personalized support.

Let’s have a conversation about how Whale can help you better engage with the next generation of depositors. Fill out the form below and our team will be in touch!