Changes in the banking industry caused by Generation Y and Z

Finally, stelle ich Euch die Resultate meiner Untersuchung zur Verfügung. Dabei ging es um die Anforderungen der Neuen Generationen an die Bankenbranche.

Die Forschung habe ich im Rahmen meines Rigorosums durchgeführt.  Wenn Ihr am ganzen Paper interessiert seid, sendet mir einfach eine E-Mail.

Key Facts:

von 29. September 2019 bis 15. Oktober 2019

Teilnehmer: 92

Age Number of respondents
before 1945 0.00% (n=0)
between 1945 and 1965 0.00% (n=0)
between 1965 and 1980 2.17% (n=2)
between 1980 and 1995 82.61% (n=76)
after 1995 15.22% (n=14)


The banking landscape is undergoing massive change. Regulations, technological progress, digitalization, the economic environment, and changing customer needs are influencing the traditional business model of banks.

Especially the changing customer needs, in particular, of the New Generations, consisting of Generation Y and Generation Z, have a significant influence and promote notable challenges within the banking industry.

The digitalization in the day to day life dictates the increasing demand for more online products and services by the financial institutions such as banks. Due to often obsolete structures, processes, or IT systems, traditional banks do not manage to keep up with new players in the market – so-called Fintecs. In addition to that, the customer experience with the giant tech companies as Facebook, Google and Amazon, sets the expectations from the banking sector even higher.

Traditional banks have challenging problems with the new requirements, and their business model is under scrutiny. The aim of the paper is to give an overview of the requirements and characteristics of the New Generations regarding the banking industry.


At which bank do you have your bank account?

The first question relates to the bank account of the respondents. Subjects had to choose between Traditional banks, online bank or both.

New regulations allow new players, so called „Online Banks“ the possibility to offer banking products. As a result, traditional banking institutions have more competition. OB often only offer a limited product plate and thus benefit from a streamlined structure such as IT costs or personnel costs as a cost advantage. Another big difference is that online banks do not have a branch network and do not offer direct personal service to the customer. Furthermore, these Online Banks target the New Generations through digital products and services. Generation Y and Z are the heavy users of the new digital possibilities.

The survey showed that 66 of the respondents (73.33%) own a bank account with a traditional bank. By comparison, only 3.33% of people (n=3) have an account with an Online Bank. Twenty-one people (23.33%) responded that they have a bank account at both (traditional and online bank). Although the new players target Generation Y and Z, more than two-thirds still have their primary financial services affiliate at a traditional institution.


Based on which aspects did you choose your bank / do you choose a new bank?

The second category of questions examined on which aspects did the respondents choose their bank or chose a new bank. The survey showed that 53 people (58.89%) choose their new institute based on personal referrals. As a second main reason, the subjects stated (n=32) that digital offerings and the choice of products are crucial. (35.56%)

Eighteen people confirmed the selection of the bank due to the branch structure and opening hours (8.89%) and personal advice from the client-advisor (11.11%). Eighteen people (20.00%) said that other reasons are crucial to them. Besides the aspect of costs, a respondent also mentioned the sustainability of the company. In addition to the personal referrals, the respondents indicated „other reasons“ that they choose a bank because of their family.


What is important to you in terms of banking?

The aspects in terms of banking essential for the New Generations were examined in the third question category.

The statement „Branch structure and opening hours“ as crucial was rejected by 27 people who answered with “disagree” or “strongly disagree” (30.00%). Thirty-five participants (38.89%) partially agreed with this statement. The mean is 3.02. The result shows that the new generations like flexibility in handling their business and because of that branch structure and opening hours are not necessary.

More than two-third, 81 participants (89.5%) of the survey agreed that transparency and cost overview of the products are crucial for them. Seven people (7.78%) partially agreed on the statement, and no one strongly disagreed. The mean is 4.36. Thus, the overview and cost transparency of the products represents an essential requirement of the New Generations to the banks.

In addition to the overview of the products, 36 respondents (40.00%) agreed, and 43 strongly agreed (42.22%) that the “Digital offer and products“ are important for them. About 15% (n=14) partially agreed and two respondents disagreed (2.22%). The mean is at 4.22. No one strongly disagreed on the defined research category.

Personal advice used to have a high priority for clients of a bank. Due to digital possibilities, the advisor concept is changing. However, 23 people strongly agreed (25.84%), and 39 agreed (43.82%) that personal advice is important to them. The mean is 3.8.

The statement “security of my financial resources“ got the highest approval. The mean is 4.76. 18 people (20.00%) agreed on this statement and 70 strongly agreed (77.78%). None of the respondents disagree or strongly disagree. After the financial crisis in 2008, but also due to cybercrime, the security aspect is increasingly important.

Easy and fast transaction of the banking business shows the second-highest approval in this category (Mean is 4.52). Only one person strongly disagreed (1.11%) and one disagreed on this statement (1.11%). Almost two-thirds of respondents (n=58) confirmed this comment in an ever-faster environment.


Which channels do you use to inform yourself about banking products?

The channels for obtaining information can be distinguished between analog and digital. Analog means to visit a bank branch or the advice from the client-advisor, as well as to call an information hotline. In the digital environment, the customer himself procures the required information about technological possibilities. These are, for example, the computer, tablet, or smartphone. The results show that 56.67%, i.e., more than half of the respondents (n=49), refer their information exclusively via digital possibilities. Thirty-two of the subjects (35.56%) combine the two channels, and only seven people (7.78%) use the analog channel. These results underline the digital affinity, as well as the flexibility of location and time independence of the NGs.


Which channels do you use to handle your banking transactions?

At present, banks offer their customers different options to handle their banking transactions. In addition to online banking, bank customers can also transact classical transactions in branches. Besides, there is still the possibility to use self-service via machines in the branches. The definition of omnichannel illustrates the use of analog and digital possibilities. The results of the survey show that 83 people (92.22%) use online banking to handle their banking transactions. Only ten people (11.11%) use the service through the bank employee. 21 people use self-service via machines in the bank branches use (23.33%).


Have you already completed a bank product online?

Due to the demands of the New Generations for digital services, it is essential for banks to offer their services online. Digitization makes this demand possible. The results of the survey, although there is a desire for digital services, show that 63 subjects (70%) have not yet completed an online product. Out of the 27 people (30%) who have already accepted the digital offer, 19 persons have opened an online or savings account. Four people have applied for a credit card, and two people have completed a loan. A person has taken out insurance, and one person has completed a securities transaction.


How often do you visit a bank branch?

The investigation showed that the branch structure and opening hours are not important for the New Generations. However, the results of the question „How often do you visit a bank branch?“ show that banks are frequently visited. Fifty-one of the respondents (56.76%) go 1-2 times a year to visit a bank. Further 12.22% (n=11) 3-5 times a year, and even 18 respondents (20.00%) more than 5 times a year. Only ten people (11.11%) never visit a branch once a year.


The relevance of the client advisor.

The next question category examined how important personal contact with the client advisor is and if the New Generations want to know the name of their advisor. The results show that 25.56% strongly agreed (n=23) and 27.78% agree with this statement (n=25) The mean is 3.52. The result shows that a personal contact person has a certain value in the service of banks.

More than half of respondents, about 66% (n=60), also want to reach the consultant online. Gen Y and Z require the offer in the area of digital services. The mean is at 3.71, and only one person strongly disagreed on this statement. (1.11%)

Although the majority of respondents inform themselves online about banking products, they believe the adviser should know about all banking products. This category found secure approval, and the mean is at 4.14. Nobody strongly disagreed, and only three people disagreed (3.33%).

In addition to the online accessibility of the consultant, the New Generations were interviewed about the availability of the consultant via phone. Here the mean is higher and is 3.83. Sixty-two people (68.69%) agreed to this category. Although GEN Y and Z show a higher digital affinity, the analog channel for customer contact finds a higher approval.

In the last area, the importance of the consultant is shown again. The mean of the statement „In the future, I won’t need a banking advisor because I will be using internet services” is at 2.78. Generation Y and Generation Z disagree with this comment, and 16 people strongly disagreed (17.78%), and 24 disagreed (26.67%). However, nine people (10.00%) agreed with this comment.


Looking at the future in terms of customer perspective: What does the term „bank“ mean to you? (multiple answers possible)

In the last question category respondents were asked about the properties of the bank in the future. 59 people (67.82%) have confirmed that the keyword „security“ is the most important aspect of the banking business. The importance of security has already been shown in the other question categories. The keyword „stability“ of the banking industry received the second highest approval rate (55.17%). Due to the financial crisis of 2008, parts of the population have a rather negative image of the industry. In the field of innovation, only 19 people (21.84%) agree that banks need to focus on this in the future. They should rather focus on the core task of classic consulting. The finding was confirmed by 39.08%. (n=34)



It is impossible to know what the banking landscape will look like in ten years. The question of whether they still exist as they do today is therefore justified. However, a change is already taking place.

The analysis of the results has shown that the stability and security of money transactions in the banking services are the most important requirements, even more in the growing digital agenda of the banks. Especially after the financial crisis of 2008, the banking industry has to deal with massive image problems, which have to be restored.

The New Generations show a tendency towards analog channels in terms of bank details, advice, and branch visits. The mentioned factors are an advantage for traditional banks as they can provide the infrastructure. For the settlement of banking transactions, Gen Y and Z use digital opportunities. Further, they use the internet to inform themselves about products and services. Therefore, Online Banks have an advantage due to simplified structures and innovations.

The characteristics and requirements of Generation Y and Z represent a mix of analog and digital channels. The solution approach to the changing demands is „Omnichannel“. Most traditional banks have already taken this path. The core content in the area of the customer is a consistently customer-oriented design of the customer journey as well as an agile organizational structure that can focus on customer needs. Further, the implementation of cross-channel incentive and control mechanisms is necessary.

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