New research from Pay.UK, the operator of the Current Account Switch Service, reveals a significant shift in banking preferences among younger adults, with Generation Z largely favoring everyday “little treats” over traditional financial incentives.
The study, which surveyed over 1,000 UK adults aged 16 to 28, found that 51 per cent of Gen Z say perks like free coffees, food discounts, and cashback matter more to them than interest rates.
Redefining the ‘good bank’
The findings suggest that the definition of a “good bank” is evolving. Nearly three-quarters (72 per cent) of respondents stated they value banks that reward everyday spending, rather than those focused on long-term financial milestones.
This preference appears driven by immediate lifestyle benefits. 64 per cent expect rewards to fit their lifestyle, and 60 per cent associate these small perks with improved wellbeing. For 72 per cent, finding deals on small indulgences is actually a motivator for better money management.
The appeal of these rewards is strong enough to drive customer churn. In Greater London, 53 per cent of Gen Z said they would switch banks specifically for better perks.
John Dentry, product owner at Pay.UK, explained the trend: “Gen Z aren’t looking for complex financial products or rewards to target in the future – they want to see value day to day. For many younger people, the big milestones such as stepping onto the property ladder, getting married or starting a family feel further away than they did for previous generations, especially in the context of cost-of-living pressures”.
Digital-first demands
Convenience remains a non-negotiable factor. Two-thirds (66 per cent) of Gen Z consider it important that rewards are accessible directly through their banking app. Furthermore, 56 per cent prioritise digital-first banking experiences above all other factors.
Dentry warned that providers failing to adapt risk losing this demographic: “Small practical perks that fit naturally into everyday spending make people feel rewarded and supported… banks and building societies that fail to deliver relevant, everyday value risk losing younger customers to those that do”.