Banks Face Loyalty Crisis as Gen Z Trades Institutions for Influencers

The financial lives of Generation Z are unfolding in a universe that looks increasingly alien to traditional banks. For decades, checking accounts and passbook savings were the entry point for young customers, anchoring relationships that might eventually blossom into mortgages, auto loans and wealth management.

But today’s rising generation is rewriting the script.

Data from the August 2025 PYMNTS Data Books report by PYMNTS Intelligence, “Gen Z Financial Habits Put Debit, Wallets and Influencers in Charge,” reveals that Gen Z consumers are saving more aggressively than their older peers, setting aside 36 percent of their income over the past six months compared with 27% among other generations.

Yet what is striking isn’t simply their thrift. It’s where that money is going. Only a fraction ends up in bank accounts. Instead, digital wallets account for 13% of their savings, and crypto, though battered by volatility, still attracts 6.3%. The gravitational center of this generation’s financial universe isn’t a bank branch. It’s a smartphone.

And a staggering 81% are swayed by influencer recommendations, nearly triple the rate of boomers.

For banks, this is more than a demographic quirk. It’s a warning sign.

One of the most consistent behaviors in the PYMNTS study is Gen Z’s reliance on debit. More than credit cards, more than traditional checks, debit is their go-to instrument for spending.

This is partly cultural. Raised during the Great Recession and coming of age during a global pandemic, Gen Z is deeply debt-averse. But it’s also technological. Debit integrates seamlessly with the mobile wallets and payment apps that dominate their daily routines.

The traditional banking model depends on deposits. Banks take in funds, lend them out, and capture the spread. But if Gen Z isn’t depositing as much, the business model gets shakier.

Digital wallets aren’t just conduits for spending; they’re becoming places to park cash. From Venmo balances to Apple Cash, Gen Z sees little distinction between money in a wallet app and money in a bank account. Meanwhile, crypto, for all its volatility, is still viewed by many as a form of long-term saving or speculation. These alternative stores of value cut banks out of their own historical franchise.

Read the report: Gen Z Financial Habits Put Debit, Wallets and Influencers in Charge

Beyond savings and spending mechanics, the PYMNTS study underscores two powerful cultural forces shaping Gen Z finance: Amazon and influencers.

Amazon is their default store, not just for goods but increasingly for services. Its seamless checkout, one-click payments, and built-in buy now, pay later (BNPL) partnerships reinforce the primacy of digital channels. Meanwhile, financial advice, once the realm of bank tellers, family advisors or mentors, now comes from TikTok, Instagram and YouTube creators.

These influencers aren’t licensed fiduciaries, but they are trusted. They speak in the idiom of the platforms this generation inhabits, and they offer guidance that feels authentic and relatable, if not always accurate.

Financial institutions face a crossroads. The youngest adult cohort is not ignoring money, nor are they reckless. If anything, they are more disciplined savers than their elders. But they are allocating their resources through different channels, different intermediaries and different sources of influence.

Banks can choose to dismiss this as a youthful phase, assuming that as Gen Z consumers mature, marry, buy homes and start families, they’ll come back to traditional accounts. But that bet seems increasingly risky. If the infrastructure of their financial lives — wallets, apps, peer-to-peer transfers — remains frictionless and rewarding, why would they return to older, slower systems?

Irrelevance is not immediate; it is a gradual decline in share of mind, followed by share of wallet. And in a generation defined by speed, decline could accelerate quickly.

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