Millennial and Gen Z card spend is on the rise, and these generations have clear expectations of loyalty programs: personalization, purpose, and simplicity.
To remain competitive, financial institutions must align their loyalty strategies with the behaviors and values of younger consumers. Here’s how.
Gen Z and Millennial Banking Preferences: Digital-First, Human-Centered
Gen Z and Millennials aren’t a monolith, but they do share some clear preferences:
- 99% of Gen Z use mobile banking apps monthly1
- 36% maintain accounts at multiple institutions, meaning banks must work harder to become primary providers2
- 73% prefer interacting with a real person over automated options, even in a digital-first environment2
Loyalty programs that bridge digital convenience with human support—like personalized in-app rewards and real-time redemption prompts—are more likely to engage these users where it matters.
Top Reward Categories Incentivizing Millennial and Gen Z Card Spend
What do consumers want from rewards? According to a report titled Investing In Relationships, published by EMARKETER3, these are the top preferences across all age groups:
- Cash back (74.8%)
- Redeemable points for products/services (52.9%)
- Discounts at specific merchants (40.4%)
Younger consumers are also more interested in rewards related to experiences, digital services, entertainment, and fitness, whereas older generations tend to favor rewards for groceries, gas, and home improvement. Customizing your redemption portfolio to meet these varying preferences is key to deeper engagement.
How Loyalty Programs Drive Word-of-Mouth and Multigenerational Growth
A well-designed rewards program doesn’t just retain younger cardholders; it turns them into advocates:
- Gen Z and Millennials share positive brand experiences online
- Younger consumers now influence older generations’ banking decisions
- Loyalty can become a multigenerational cycle of trust and engagement
Capturing Millennial and Gen Z Card Spend Early Builds Long-Term Loyalty
Capturing younger cardholders isn’t just about short-term growth; it’s a long game. Financial institutions that become trusted partners early in life are better positioned to support cardholders through:
- First checking accounts
- Student loans and major purchases
- Homeownership and retirement planning
These multi-stage relationships increase customer lifetime value and generate long-term revenue, especially when loyalty programs reward behavior across life events.
Loyalty Program Best Practices for Banks and Credit Unions
To future-proof your loyalty strategy:
- Prioritize mobile-first, personalized experiences
- Offer value-aligned redemption options
- Make rewards simple to discover and use
- Leverage trust in banking relationships to boost brand equity
Remember: it’s not just what you offer—it’s how you offer it that drives behavior.
Ready to future-proof your financial institution? Let’s talk.
Sources:
1Can banks undo Gen Z’s distrust of financial institutions? EMARKETER.
2Gen Z and the Future of Finance. Adrenaline.
3Investing in Relationships. EMARKETER.