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- Banking Milz #8: Understanding the MilZ Mindset and How to Adapt to It (Part 2)
Banking Milz #8: Understanding the MilZ Mindset and How to Adapt to It (Part 2)
Fonta Gilliam
May 05, 2025
In this week’s deep dive, I continue to explore how sky-high prices and attractive savings rates are changing Gen Z’s relationship with money.
Last week, I dove into the rise of budgeting apps and viral challenges, to the trend of “doom spending” and the pursuit of a “soft life,” to understand how younger consumers are coping with their financial challenges in creative (and sometimes concerning) ways. (Banking MilZ #7: Understanding the MilZ Money Mindset and How to Adapt to It — Part 1)
This week I’ll show how financial anxiety is driving demands for transparency, personalization, and wellness tools – essentially a call for banks to step up.
And I highlight innovative responses, including case studies like Wellthi’s social savings platform and Mastercard’s new flexible payment solutions, to illustrate how forward-thinking brands are adapting (without the sales pitch).
As always, jump straight to the Deep Dive or take a moment first to catch up with the latest industry news. On your way out, please let me know what you thought in my weekly 3 second poll. And if you are enjoying this newsletter, consider recommending it to a friend or colleague by sharing this link:
In this issue
ICYMI
“Gen Z & Millennials: The Credit Unicorns?” — Despite the stereotype of young people being financially irresponsible, American Express reports that their Gen Z and Millennial cardholders boast higher average FICO scores (~750) and lower delinquency rates compared to older generations. These younger users are also spending about 20% less than their elders. It seems they’re not just chasing avocado toast but are actually managing their finances prudently. Source: (businessinsider.com)
“Gen Z’s Recession Prep: TikTok Tips Over Traditional Advice” — As Australia faces economic downturns, Gen Z isn’t panicking. Instead, they’re turning to digital platforms like TikTok for financial advice, diversifying income streams, and adopting long-term investment strategies. They’re leveraging their digital savviness to navigate financial uncertainties, often outperforming traditional methods. Source: (theaustralian.com.au)
“No-Spend Challenges: Gen Z & Millennials’ Financial Detox” — In an era of rampant consumerism, many young adults are embracing “no-spend” or “low-spend” challenges to curb unnecessary expenses and rebuild savings. A survey revealed that 20% plan a “no-buy year,” while 56% aim for a “low-buy year.” It’s a financial cleanse, aiming to instill better spending habits and financial awareness. Source: (marketwatch.com)
“FinTok: The New Financial Advisor for Gen Z & Millennials” — Traditional financial advice is taking a backseat as platforms like TikTok’s “FinTok” become the go-to for financial literacy. Users report gaining an average of 42 pieces of financial advice, with topics ranging from side hustles to crypto investing. It’s a blend of entertainment and education, reshaping how young adults approach finances. Source: (nypost.com)
“Gen Z’s Investment Strategy: Values Over Returns” — Gen Z and Millennials are prioritizing investments that align with their personal values, even if it means accepting lower returns. A U.S. Bank survey highlights their preference for companies with strong social and environmental stances. Despite economic challenges, this generation is committed to value-based investing. Source: (investopedia.com)
DEEP DIVE
Understanding the MilZ Money Mindset and How to Adapt to It (PART 2)
By Fonta Gilliam (Part Two in a Two-Part Series)
High inflation and economic uncertainty haven’t just changed MilZ’s behaviors; they’ve fundamentally reset what my generation expects from financial institutions.
Banks and credit unions are no longer just vaults or transaction hubs – in our eyes, they need to be partners, friends, and even wellness providers. Three themes ring out in particular: transparency, personalization, and financial wellness.
1. Transparency
Trust in institutions is hard-won with MilZ.
This is a generation raised during the Great Recession as kids, who saw banks get bailed out while ordinary families struggled.
We are also digital natives used to having information on-demand.
As a result, MilZ has a low tolerance for opaque fees, fine print, or “trust us” attitudes. Banks that hide the ball on charges or make terms convoluted will quickly lose this savvy cohort.
In contrast, those that are upfront and clear can stand out. For example, many neobanks and fintech apps have built their brand on simplicity – no overdraft fees, no minimum balance, instant alerts for any charge.
These features greatly appeal to us who want to know exactly where they stand.
2. Personalization
MilZ has grown up with Netflix algorithms and Spotify playlists tailored to our tastes. We’re baffled (and frankly bored) when our bank treats us like an account number instead of an individual.
Personalization in banking can take many forms – targeted advice, AI-driven insights, virtual advisors, custom financial roadmaps, etc.
The common thread is giving us content and solutions that fit our life and goals.
In an Oliver Wyman study, 59% of Gen Z said they use AI-powered financial tools and even allow AI to make certain budgeting or saving decisions for them. We LOVE following influencers who make it easy for us to make a decision.
As I shared previously in Banking Milz #5, we see high engagement with features like Bank of America’s virtual assistant Erica or fintech apps like Cleo, which use AI to analyze spending and give nudges.
These tools talk in a casual, friendly tone that resonates with younger users (Cleo even roasts your spending habits humorously if you opt in).
As one banking leader put it succinctly: Don’t just show balances; help interpret them in the context of the customer’s life.
For example, if a MilZ user’s paycheck hits, automatically suggest a tailored split: “Here’s $50 toward your travel fund, you can afford $30 for dining out, and still stay on track for rent.” That level of proactive personalization is increasingly expected.
Quick Stats: What MilZ Wants from Banks
💸 Transparency: No Hidden Fees, No Nonsense
A significant majority of Gen Z and Millennials are ready to switch banks for clear, upfront communication. We also show a preference for brands with straightforward policies, even favoring tech companies over traditional banks in this regard.
🤖 Personalization: Tailored Financial Experiences
Over half of Gen Z and Millennials feel our current banks don’t fully understand our needs. Yet, a substantial portion already utilizes AI-driven tools for budgeting, indicating a strong openness to tech-driven personalization.
🧠 Financial Wellness Tools: Clarity Over Complexity
More than 60% of Gen Z and Millennials admit to being confused by financial jargon. We seek financial education content and easy-to-use budgeting tools as top features when choosing where to bank.
🌍 Social Impact: Values-Driven Banking
A significant majority of Gen Z and Millennials believe that companies have a responsibility to address environmental and social issues. We are more likely to trust and engage with brands that align with our values, including transparency in ESG practices and community impact.
3. Financial wellness & education
Perhaps the biggest shift is that younger consumers want our bank to help improve their financial health, not merely store their money.
85% of Gen Z say we have financial barriers to achieving their goals and we are hungry for tools to overcome them.
This includes budgeting apps, credit score boosters, early paycheck access, and clear, stackable social media content on everything from taxes to budgeting to investing.
Remember, many MilZ never received formal personal finance education in school. 80% of us tune to YouTube, TikTok, and Reddit for advice – not all of it good. Now we’re effectively saying to bankers: can you give us real guidance? We’ll listen if you stop selling to us and start listening to us.
Leading institutions are responding. For instance, Ally Bank’s hard push on financial literacy content or Capital One Cafes that blend banking with free money coaching sessions are moves aimed at holistic wellness.
I’m not saying that I’d go to a branch for my favorite latte, but it’s a step in the right direction.
Even smaller credit unions are embedding financial wellness coaches into their apps.
The goal is to become a trusted coach in Gen Z’s financial journey, not just a faceless service.
Financial institutions must become partners in Gen Z’s financial journey – not just transactional providers.
That might mean offering stress-free tools (like automated micro-savings, or apps that round-up purchases into savings) and mental health-aware messaging.
It could also mean transparency in hardship: if a customer is struggling, show empathy and offer free solutions (e.g., easy ways to restructure debt, skip-a-payment options, etc.), rather than hit us with fees. Gen Z values brands that care about our well-being.
One fintech, SpringFour, does a great job of vetting free government resources in each state that banks can share with customers that are struggling financially.
For bank and credit union executives, these expectations might sound daunting. But they are also a roadmap to relevance. If you can offer a transparent, personalized, wellness-oriented experience, you’ll not only attract young customers – you’ll keep us for the long haul, as loyal advocates.
4. The Innovation Imperative: Rethinking Products & Services for a New Generation
Given all these shifts, one thing is clear: incremental tweaks won’t be enough. Winning over Gen Z and Millennials in this high-rate, high-anxiety era requires rethinking traditional banking models.
So what might this look like in practice? Let’s consider a few areas ripe for reinvention:
Savings and Spending Tools – with a Twist: Rather than basic savings accounts, imagine goal-based “smart” accounts that adapt to user behavior. Some fintechs now offer features where if you overspend on dining out one week, the app automatically suggests curbing another expense or adjusts your savings goal. Banks should integrate such budgeting intelligence natively. Also, consider rewards for saving, not just spending. For example, promotional “boosts” that temporarily raise your APY if you meet a savings streak, or partnerships that give retail discounts for people who hit budgeting milestones.
Embedded Community and Social Finance: My generation is inherently social, and money is becoming a social topic (just look at #FinTok). Yet most banking apps are solitary (see Banking MilZ #6). This is where innovators like my company, Wellthi, come in. Wellthi offers partners a white label turnkey mobile branch with social feeds, AI-powered insights and group saving challenges, turning banking into something that feels like a social platform, not a ledger. By offering a community-oriented experience, bankers can increase engagement and loyalty. Case in point: Wellthi’s platform helps partner banks see higher app usage and savings rates by making finance communal and culturally relevant. Early adopters reported a lead generation rate that is 17% higher than the industry average.
Hyper-Personalized Credit and Payment Options: Traditional one-size-fits-all credit cards or loan products may not cut it. Your MilZ consumers are used to customizing everything. In response, companies like Mastercard are innovating. Mastercard recently launched “One Credential,” a digital solution that lets a user decide, for each transaction, whether it draws from debit, credit, or installments. Think about that flexibility: a 30-something could set their preferences so groceries always debit from checking, larger purchases automatically go on a low-interest installment plan, etc. It’s all about control. Banks and CUs should similarly look at how to offer MilZ customers more customizable credit – maybe allowing us to easily toggle certain expenses to a 3-month installment, or providing dynamic credit lines that grow as they prove themselves. The key is giving choices and visibility, rather than a static credit card bill that just arrives. (Disclosure: Mastercard in a Wellthi partner.)
Finally, innovation must extend to brand ethos and communication. My generation is entrepreneurial and socially conscious. We appreciate bold, authentic voices. Financial institutions should adopt a tone that is informative but not patronizing, optimistic but frank. Celebrate small wins with customers (like when we hit a savings goal) and be transparent when things go wrong (own up to outages or errors). Show that you’re using tech with us (e.g., using AI to help us, not just to cut costs).
Conclusion: Bold Moves for a New Money Mindset
The “High-Rate Wake-Up Call” isn’t just a catchy title – it’s a genuine call to action for banks and credit unions. Gen Z and Millennials have been jolted by economic forces into reevaluating their relationship with money. We’re saving like never before, yet also spending in striking ways to cope with uncertainty. We’re demanding more value, guidance, and flexibility from financial providers – and we’re willing to walk if we don’t get it.
It’s not black and white for us.
The era of 5% APYs and inflation angst can be an opportunity–if you choose to act on it. Some financial institutions will use it to reinvent and capture the next generation of customers, securing decades of growth. Others will hit snooze on the wake-up call, only to find in a few years that Gen Z has moved on to platforms and brands that did pay attention. Which one do you want to be?
— Fonta
Meet the Future of Finance!
Wellthi Technologies—backed by Mastercard & Northwestern Mutual Future Ventures—offers a turnkey Virtual Advisor Technology app tailored for lowering branch costs, driving low-cost deposits, and maximizing billion dollar opportunities with under 45 consumers. Engage Millennials & Gen Z with social finance features that drive loyalty and deposits. Our platform transforms banking into a community experience with goal sharing, crowdfunding, and peer support—helping credit unions stay relevant, digital-first, and growth-ready. Seamlessly onboard new members, boost engagement, and unlock new revenue streams—all without costly tech investments.
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