Introducing our new ‘Letter from the Editor’ series featuring exclusive insight and opinion-driven analysis from Tearsheet editor Sara Khairi. The focus is to link ideas, question assumptions, and track shifts across both mature and emerging trends in financial services.
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Issue # 1
There’s a common assumption in financial services that if you build the right product, customers will come and, more importantly, stay.
Gen Z is testing that assumption in real time, and it’s not holding up particularly well.
What’s emerging isn’t just a new customer segment with different preferences. It’s a structural shift in what a financial relationship actually is: how institutions show up, consistently, across moments of uncertainty. And that’s a harder thing to engineer.
A few weeks ago, I came across someone describing how a 21-year-old navigates finances – phone tabs open, apps switching, questions half-Googled, half-asked in group chats.
It sounded like a lot of effort. Gen Z isn’t rejecting financial services. It’s rejecting the terms on which financial services have traditionally been offered.
For decades, the model was straightforward. You acquire early – a student checking account, a starter credit card – and you build outward from there. Products stack, balances grow, loyalty compounds.
But Gen Z doesn’t move in straight lines like that. They might open an account with Chase, check their credit on Intuit Credit Karma, experiment with investing on Robinhood, pick up budgeting habits from TikTok, and still call their parents when something feels off. That’s curation. And in that ecosystem, no single institution owns the relationship.
The industry initially misread this behavior. If young users are digital-first, build better apps; if attention spans are shorter, simplify the UX; and if financial literacy is low, add educational content left, right, and center.
To be fair, some of it worked. We can see it in some of the mindful redesigns, the cleaner interfaces, and the push into financial education. Chime leans into a fee-free structure, mobile-first design, and tools designed to build financial independence without traditional banking hurdles.
But it still feels like we’re solving around the edges, when Gen Z’s friction with finance is interpretive.
Unavailability of tools or features was never the problem. The challenge is that younger users struggle because the system fails to explain itself in a way that feels coherent, timely, or aligned with how they actually experience money, which, more often than not, is messy, emotional, and non-linear.
A large share of Gen Z is already banked and entering investing earlier than previous generations, while also checking their credit scores more often. Despite having more financial tools at their disposal than any generation before them, money continues to be a leading source of stress; up to 70% report losing sleep over it, with many feeling it’s slipping out of their control. A key reason is the persistent lack of clear direction.
This is where the disconnect becomes clearer: the gap between awareness and agency is where many financial products still don’t quite land.
We’ve treated financial products as endpoints, while Gen Z experiences them as starting points. Opening a credit card isn’t the achievement; it’s the beginning of a hundred small, uncertain decisions like how much to spend, when to pay, how it affects your score, and what comes next.
And most products go silent right after that moment.
Some of the more informed players have stepped up to fill that silence by inserting themselves into the decision-making layer. At Intuit Credit Karma, showing a credit score is the beginning of a conversation: what happens if you open this card, miss that payment, pay this balance down? Small simulations, nudges, signals – almost invisible interventions that turn a static number into an interpretable context.
Digital-first, but not digital-only…
Some industry leaders increasingly talk about young customers being ‘digital-first, but not digital-only.’ That line dismantles one of the industry’s favorite assumptions.
Gen Z is digital by default; that’s no longer a differentiator, it’s table stakes. But for too long, they’ve been reduced to that one label: digital natives. The assumption has been that if everything is seamless and mobile-first, they’ll be satisfied. But that misses the point; they’re also looking for meaning behind the financial moves they make.
That’s why their behavior takes on this hybrid shape. They’ll use Chime for everyday banking, check scores on Intuit Credit Karma, experiment with investing on newer platforms, and seek human advice when the stakes feel high.
What they’re really after is contextual relevance – a feeling that the product understands where they are and what they need in that moment. And this is where things get uncomfortable for the industry because context doesn’t scale as neatly as products do. It requires knowing the moment they’re in: first job, first rent payment, first financial mistake, and systems that respond beyond execution.
That steers financial services toward its historical blind spot – adaptability.
A few institutions are starting to internalize this realization to capture the younger cohort, even if they wouldn’t phrase it that way. We can see it in how Citizens is moving from product-led thinking to life-stage-based approaches. Rather than treating young customers as separate ‘product holders’ – a student account here, a loan customer there, a credit user somewhere else – it’s structuring the relationship around how financial life unfolds. When a student signs up for an account, she’s stepping into a journey that can evolve from college planning through student lending, into early career banking, and even first steps into entrepreneurship. The bank’s focus is now shifting from standalone products to continuity across transitions, with guidance and tools layered into each stage.
The younger generation doesn’t need finance to be simpler so much as more legible. Simplification strips away complexity; legibility helps make sense of it. And complexity isn’t going anywhere – if anything, finance is becoming more layered, with more choices, tools, and inputs. Gen Z recognizes that. What they’re really asking for is help navigating it.
The seesaw between Gen Z and incumbent FIs
The younger generation’s skepticism toward banks was seen as a generational gap issue. Fix the messaging, improve transparency, rebuild credibility. But Gen Z’s skepticism is about selectivity.
They’ll try your product. They’ll even use it actively. But they won’t anchor their financial life to it unless it keeps proving its value: clearly, consistently, and in a way that actually makes sense to them.
Loyalty, in this context, is continuously negotiated. It shows up if you keep being useful. And usefulness is a much higher bar because it entails whether a product still holds up a few decisions later, when the stakes and the questions start to evolve.
The industry is slowly coming to terms with the realization that Gen Z is discerning. When something feels unclear, they won’t push through; they look elsewhere. If a product stops helping, they replace it. And when guidance is missing, they stitch information together across fragmented channels and sources.
So, where does that leave financial institutions? In an unfamiliar territory, competing less on traditional metrics like rates, features, or access, and more on clarity. On whether the experience actually helps a young adult feel a bit more confident moving forward, with ‘progress’ itself becoming the new value proposition.
Gen Z doesn’t want to be sold a financial future. It wants to feel capable of navigating one. That shift changes almost everything: how products are designed, how success is measured, and what it actually means to ‘win’ a customer.
If we follow the logic through, the model that outperforms is the one that continues to add value five, ten, twenty decisions down the line, even if that means sharing the relationship with a dozen other platforms along the way.
We as an industry have long optimized for ownership; Gen Z is pushing it toward orchestration. And we’re still only beginning to understand what that shift entails.
– Sara
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