In today’s episode, we talk about what young people want most from a bank, their favorite alternative investments, and what their parents have taught them about saving for the future. Join the discussion with host and Head of Business Development Rob Rubin, Analyst Lauren Ashcraft and Senior Analyst Grace Broadbent.

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Episode Transcript:

Rob Rubin (00:05):

Hello everyone and welcome to the Banking and Payment Show, a behind the numbers podcast from eMarketer. Today is April 8th, 2025. I'm Rob Rubin, head of business development at eMarketer and your host today.

(00:17):

Today, we're going to chat about how young people, not me, bank, spend, and invest their money. Joining me are EM analyst Grace Broadbent and Lauren Ashcraft. Hey there, guys.

Lauren Ashcraft (00:29):

Hi.

Grace Broadbent (00:30):

Hi, guys. I'm excited to be here.

Lauren Ashcraft (00:31):

Me too.

Rob Rubin (00:32):

I'm excited to have you both here and in fact I've had you both on but never together.

Lauren Ashcraft (00:36):

That's right. Happy to be here with you, Grace.

Grace Broadbent (00:39):

I know.

Rob Rubin (00:40):

Have you been on any podcasts together or this is the first?

Grace Broadbent (00:42):

No.

Lauren Ashcraft (00:42):

This is our first one.

Rob Rubin (00:44):

All right. Well I want to ask you guys an icebreaker, just to sort of get us going, and I'm not trying to foreshadow a number or a type of number as we move forward, which people will understand, but do either of you own any crypto?

Lauren Ashcraft (00:58):

No.

Grace Broadbent (00:59):

I sold mine last year.

Rob Rubin (01:02):

What did you own?

Grace Broadbent (01:03):

I owned Bitcoin. I bought it in 2020 during the peak and it went up last year, but more so I just wanted that money to buy something.

Rob Rubin (01:03):

All right.

Grace Broadbent (01:12):

So it was not enough to really make a dent either way. So I took the money out, made a big purchase, and now...

Rob Rubin (01:18):

All right, there you go.

Grace Broadbent (01:19):

I'm no longer a crypto owner.

Rob Rubin (01:19):

You're no longer a crypto owner. I just think it's interesting generationally who owns crypto because I wouldn't, for me, I can't even think about it.

Grace Broadbent (01:29):

No, you've never purchased anything, thought about it?

Rob Rubin (01:33):

Well, we'll get to this. In terms of investing, I don't believe you should invest in something you don't understand. And even though this is my space and I can sort of understand it, the volatility of it and the fact that it could be gamed sort of keeps me away.

Lauren Ashcraft (01:46):

Also, it's to get a whole Bitcoin at this point is really expensive.

Rob Rubin (01:51):

You get a house

Grace Broadbent (01:53):

I owned oh 0.0001, I'm pretty sure.

Lauren Ashcraft (01:56):

Awesome.

Rob Rubin (01:58):

So I didn't want to foreshadow anything about this episode. So I want to jump in today because we're going to be doing something different and I'm super excited about it. Today's podcast is story by numbers meets for argument's sake.

(02:15):

Typically, in a story-by-number segment I pick a number on a topic and then we discuss it. And then in for argument's sake, we argue nicely about the topic. Today, each of us has come prepared with three numbers that reflect what we think represents how young consumers, again, not me, bank spend and invest. So let's see how this goes.

(02:40):

I'm going to choose Lauren first because we're going to go with banking. Lauren, what number do you think best reflects how young people bank?

Lauren Ashcraft (02:49):

I went with the number 13 and here's why. There are 13 factors that US Gen Z banking consumers consider before choosing a new bank, with the top factor being ATMs near them because they do rely on cash more than other generations. And then the bank's reputation, the branches near them, which is interesting. They do care about being able to go to a physical branch. Fraud prevention, customer service, the fees, interest rates for accounts, banking mobile app quality, discounts, incentives, awards.

Rob Rubin (03:28):

So your 13 are just the 13 things that people care about when they choose a bank.

Lauren Ashcraft (03:28):

Yes.

Rob Rubin (03:33):

Is it different than what other people care about? Because I could say that I care about ATM locations too.

Lauren Ashcraft (03:39):

So these are ranked in order of how much Gen Zers care about them. So the top priority when choosing a bank with 42.4% of Gen Zers listing this as their top priority is the ATM proximity. And then it goes all the way down to breadth of products and services, which is 2.8%.

Grace Broadbent (04:02):

That's very interesting that Gen Z's top factor is ATMs.

Lauren Ashcraft (04:02):

That's what I thought.

Grace Broadbent (04:08):

They're really supposed to be [inaudible 00:04:09]

Rob Rubin (04:09):

It's not even the 13 number. It's that's the number to me that's so fascinating right now is ATMs, especially with my number, which was 60% use mobile banking.

Lauren Ashcraft (04:19):

Interesting. You know what? I think they've, because everything's so digital these days, there's been sort of this backlash in going anti-digital for certain habits and they save by putting wads of cash into envelopes. It's called cash stuffing, and that's also like one of their budgeting tactics. So they really do care about being able to get their hands on cash.

Grace Broadbent (04:45):

Cash stuffing, wasn't that a trend on TikTok that a influencer started?

Lauren Ashcraft (04:45):

It was. Yeah.

Rob Rubin (04:50):

I absolutely never heard of this.

Lauren Ashcraft (04:50):

Exactly.

Rob Rubin (04:52):

Is it like stuffing cash in a mattress? Like literally old-fashioned?

Lauren Ashcraft (04:55):

Yeah, except it's like envelopes that say like for food or going out. Yeah.

Rob Rubin (05:01):

So when the burglars come they can find it super easy.

Lauren Ashcraft (05:04):

Totally.

Rob Rubin (05:08):

All right, what's your number, Grace?

Grace Broadbent (05:10):

So this ATM data point also does not get along with my number. Mine is that Cash App is, it's not really a number, it's more of a data point, so I hope that's okay.

Rob Rubin (05:10):

All right.

Grace Broadbent (05:20):

Cash App is Gen Z's second-highest ranked bank in terms of consumer banking satisfaction scores. The only bank that ranks higher than cash app is Bank of America. And I think that's so interesting because Cash App is not a traditional bank by any means. It has banking features, it has a savings account, a checking account, but no ATMs, no physical locations, none of those things we were just talking about.

Lauren Ashcraft (05:46):

Oh interesting.

Rob Rubin (05:48):

That is interesting. Cash App is block, right?

Grace Broadbent (05:49):

Yes, it's owned by Block. But yeah, they've been pushing heavily into banking services in recent years.

Rob Rubin (05:54):

I just can't reconcile the ATM locations. Honestly, that is the thing that stands out because like just because I have young adult children and they just don't really use cash unless they're doing something that they don't want anyone to know about, I think. So is it that we have a drug problem in the young community? Is this what we're talking about now?

Lauren Ashcraft (06:22):

Like Grace was saying like it was a viral TikTok trend and I think Gen Zers kind of go there for financial advice.

Rob Rubin (06:32):

Well, we're going to take all this and move on to spending, because now we're talking about like they have mattresses and pillowcases and envelopes in their fork drawer that saved for food. And I want to move on to spending. So Grace, it's your turn. What's your number and why? In terms of how young people spend.

Grace Broadbent (06:50):

Yes. Okay. My number is one in six Gen Z credit card users have maxed out their credit cards.

Lauren Ashcraft (06:58):

Wow.

Grace Broadbent (06:58):

Which means they've utilized more than 90% of their credit limits, which is well higher than any other generation.

Rob Rubin (07:05):

Yeah.

Grace Broadbent (07:05):

And I will preface that part of this is they tend to have lower credit limits, so it's obviously easier to max out a credit limit when it's $3,000 versus 10,000, but that also still doesn't bode well for their overall consumer financial health.

Rob Rubin (07:22):

I picked a different number but in the same theme that more than 60% of Gen Z's and millennials use buy now, pay later. Right?

Grace Broadbent (07:31):

Yes. And I think it's really interesting to look at their credit card usage in tandem with their BNPL usage and it really gives a sometimes scary look into their finances.

Rob Rubin (07:40):

It does. And I've been through this before on this show about how the BNPL providers don't report to the same credit bureaus, so I still say there's going to be a reckoning one day when the full credit portfolios become visible.

Grace Broadbent (07:57):

Yeah, and I think, so BNPL delinquencies is something I've followed closely of like how many people are not paying off their BNPL debts and those are actually much lower than credit cards. People are paying off their BNPL debts.

Rob Rubin (08:10):

All right.

Grace Broadbent (08:10):

But the issue that it creates is that they now have less money to pay off their credit card debt.

Rob Rubin (08:10):

Credit card debt.

Grace Broadbent (08:16):

And credit card debts are building and building and building.

Rob Rubin (08:18):

But now we're going to, do you think we're going to start to see like because the regulators are all missing that maybe we're going to start to see lots of like balance transfer offers to try to get people to move balances from one place to the next and sort of crazy things to try to address the credit card balance issue, give people more credit?

Grace Broadbent (08:40):

I think definitely. Yeah. Especially with interest rates at record highs right now. I think there's a lot of appeal for that and it's only making the debt problem so much worse.

Rob Rubin (08:52):

Lauren, you've been quiet here. I want to hear your number.

Lauren Ashcraft (08:56):

Okay, so this, it actually goes hand in hand with what Grace was saying. I have that 75 of Gen Zers believe that they deserve, which I think is an interesting word, to get most of what they want. And there's some other stats that go with that. 70% of Gen Alphans believe they have a basic understanding of money and they prioritize their ability to buy luxury goods including skincare products that 30% of them are too young to need. So just like some interesting spending habits that probably go hand in hand with the credit card debt.

Rob Rubin (09:34):

With TikTok.

Lauren Ashcraft (09:34):

Yeah.

Rob Rubin (09:35):

Oh, I was with TikTok.

Grace Broadbent (09:36):

And TikTok.

Lauren Ashcraft (09:38):

TikTok and, yeah, growing credit card balances. Yeah, I think especially the TikTok is kind of the fear of missing out aspect of they really want to buy what they see others buying. And we've also, in terms of credit card spend, one of the top spending categories is always travel and experiences for this generation. I mean it kind of goes hand in hand to that, that they want these crazy experiences, they want to travel. They're not as much focused on saving money they want to spend and experience life right now.

Rob Rubin (10:09):

We are headed for a big wall, I'm telling you. And we're moving quickly. There's going to be a reckoning if all these credit card debts and the perspective, this sort of an entitled perspective from where I sit of young people saying that they deserve all these things. And I don't think that it's entitlement, I think it's the messaging that they're getting.

Lauren Ashcraft (10:31):

Yeah, definitely that FOMO from social media.

Grace Broadbent (10:35):

And a lot of it also is a lot of this generation was stuck at home during COVID years and it is the quote, unquote "revenge spending" and revenge spending was only since year the last year.

Rob Rubin (10:50):

I thought that was if you broke up with your partner, that was the revenge spend.

Grace Broadbent (10:53):

Well that could be another form of it as well. But revenge spending is what they were calling the post-lockdown era where people were spending crazy on travel and concerts and experiences because we couldn't do that for a couple of years.

Rob Rubin (11:07):

Is that revenge or just pent-up demand?

Grace Broadbent (11:09):

It's pent-up demand, absolutely. But-

Rob Rubin (11:11):

Because revenge is like when you break up with someone but you, they still get your credit card bill and you go out and you-

Grace Broadbent (11:18):

Yeah, you're making an Amazon purchase on your ex's credit card.

Rob Rubin (11:21):

Or you buy a lot of shoes.

Lauren Ashcraft (11:22):

You keep that Netflix login.

Rob Rubin (11:26):

Netflix will work that out.

Lauren Ashcraft (11:28):

True.

Rob Rubin (11:31):

All right, so it's my turn in the barrel. We're going to transition to investing. And I just want to say before we start that we haven't painted the best picture, in my opinion.

Grace Broadbent (11:41):

I know.

Rob Rubin (11:41):

We've painted a picture of entitled people so far, right? They need cash, right?

Grace Broadbent (11:42):

Yeah.

Rob Rubin (11:47):

They want to buy things that they can't afford. And now we're going to get to investing. And my number is that, and this is sort of funny, I think, given as what we've been talking about, is that a study found, the standard study found that Gen Z's biggest financial priority, 79% said that it's saving.

Lauren Ashcraft (12:08):

Yes.

Rob Rubin (12:09):

So here it might relate to they think they're saving money by putting it in envelopes and making it easily accessible for themselves. That usually is not the best approach, but at least it's something. It's like you could say maybe they're trying. But I find it hard to believe that they're trying to save money given that they've been racking up these credit card debts and things like that.

Lauren Ashcraft (12:34):

I think it's a difference of what they want to do versus what they're actually doing. Yes, of course, they want to save, but I mean the numbers are showing that they aren't right now. And maybe they, A, don't want to necessarily save, they want to spend on these experiences things like we were talking about, but also potentially they just might not have the financial ability right now to save, especially with inflation and the job market and things like that.

Rob Rubin (13:01):

Maybe also there's, because one of the interesting things that I didn't read is that a lot of the savings goals are short term, right? And so like things that they want to acquire, things that they feel they need versus saving for retirement.

Lauren Ashcraft (13:16):

Yeah. Maybe it's more so saving for [inaudible 00:13:19]

Rob Rubin (13:18):

A different number, according to a CNBC and GenLab study, 61% of young adults are not saving for retirement. So if 79% say saving is a priority but aren't saving for retirement, then-

Grace Broadbent (13:32):

Yeah, maybe they're saving for these concerts and trips we were just talking about.

Rob Rubin (13:37):

I don't know.

Lauren Ashcraft (13:37):

Yeah.

Rob Rubin (13:38):

I sort of feel like the thing that we're not addressing here is housing.

Lauren Ashcraft (13:42):

Yeah.

Rob Rubin (13:42):

And the enormous cost of housing for young people and if they look out into the future, the hard part like acquiring a house seems unaffordable probably.

Lauren Ashcraft (13:52):

Yeah.

Rob Rubin (13:52):

So maybe like when you use the word revenge, it's really, maybe it's some of the spending is around reprioritizing from past generations. In past generations, and I'll use myself as an example, we were always told that we should be saving for our future, saving for our retirement, saving for our children's education. So we always had this sort of long-term objective that was around what was messaged around savings. But now everything is so expensive and unaffordable and it's gone, housing in particular, that maybe savings priorities are more short term because the idea of homeownership seems further afield for, perhaps. What do you think?

Lauren Ashcraft (14:35):

Actually, I write quite often about the psychology of what's going on with Gen Z spending and saving. And recently I wrote an article about how a lot of this behavior is informed by they've watched their parents save and try to save and work multiple jobs and their retirement and savings got absolutely obliterated multiple times over the last couple of decades. And it's happening again right now that if you're a Baby Boomer that was getting ready for retirement, your portfolio is probably way down right now, which is extremely concerning. So there maybe it's kind of, it just informed a lifestyle where-

Rob Rubin (15:20):

I don't know that portfolios are down as much as people at an age that's close to retirement, people at an age close to retirement are coming to the realization that they're going to need a lot more money than they actually have. Right?

Lauren Ashcraft (15:20):

Yeah.

Rob Rubin (15:35):

And so it's not that they weren't trying to save or they didn't put an amount in their 401(k)s as they've moved along or whatever. But the cost of things today, Social Security is not enough. The idea that you would need 25 times your earnings as savings in order to retire feels really out of reach probably. And I guess if the message is, because this is about young people, is they see that. So maybe they're, while my generation was prioritizing retirement and maybe we failed, but maybe they see the failure and say what's the point? And so they're saving for like a nice car or something else.

Lauren Ashcraft (16:17):

I really think that that's a lot of it is that they've just watched their parents try so hard and struggle to put so much away and they want to just experience maybe also because of what you said, Grace, that in such formative years they were just kind of sitting in front of a computer at home locked in. So...

Rob Rubin (16:17):

Right.

Grace Broadbent (16:38):

Yeah, it's just concerning because ignoring the issue isn't going to make it go away. They can-

Lauren Ashcraft (16:43):

Exactly, yeah.

Grace Broadbent (16:44):

I will say my data point has to do with retirement, but it's a little bit of a twist. Gen Z investors are four times more likely to own crypto than a retirement account.

Lauren Ashcraft (16:58):

That's interesting.

Grace Broadbent (16:59):

Which goes back to crypto that we were talking about before and also just speaks to the large, it more so speaks to a large lack of savings for retirement right now. And people are, they're willing to almost invest in these quote "riskier assets" like Bitcoin and crypto and see if they can make some quick money even on these meme assets and things like that.

Lauren Ashcraft (17:22):

Actually, what I was going to bring up overlaps with yours again, Grace.

Grace Broadbent (17:26):

Yeah, let's hear it.

Lauren Ashcraft (17:28):

So even though it's still only 17% of their portfolio, Gen Zers are three times more interested in alternative investments than any other age group. And the alternative investments that they're most interested in are crypto, which you mentioned, real estate, which is so expensive right now, but there's also real estate investment trusts, and private equity is something that they're interested in. So I recently wrote about that as something that banks can make sure that they offer young investors as opposed to just stocks.

Rob Rubin (18:03):

This episode's been fascinating. I wouldn't say it's been fun.

Grace Broadbent (18:09):

No.

Rob Rubin (18:10):

It's not been funny. It's been serious.

Grace Broadbent (18:13):

No, I know. It's like all my laughter is pure nervous laughter because[

Rob Rubin (18:17):

Yeah, there's a nervousness to it, right?

Grace Broadbent (18:19):

Yeah.

Lauren Ashcraft (18:19):

Yeah.

Rob Rubin (18:20):

I feel like we're headed to a place and I think that I'm going to have to have an episode on something, have you ever heard of a "debt jubilee," the term?

Grace Broadbent (18:28):

No, what is that?

Rob Rubin (18:29):

A debt jubilee is a clearance of debt from public records across a wide sector or a nation. Such a jubilee was proposed as a solution to debt incurred or anticipated during the COVID-19 recession. So this is like the government says everybody's debt is so big that it's zero now. That's the jubilee part. Now-

Grace Broadbent (18:50):

Do you think that can actually happen?

Rob Rubin (18:51):

I mean that's like bottoming out, right?

Lauren Ashcraft (18:51):

Yeah.

Rob Rubin (18:54):

You just told everybody to, I don't know that that's going to happen. But that's like a thing. There's been books written about debt jubilees. I think it's in the Bible.

Grace Broadbent (19:03):

Oh my gosh.

Rob Rubin (19:04):

It's been around. But that might be an interesting topic to talk about. Or what are the implications of a debt jubilee?

Grace Broadbent (19:12):

Yeah, absolutely.

Rob Rubin (19:12):

And are we headed towards one?

(19:14):

I want to thank you guys for this episode, which was not a normal episode. It wasn't fun, but it was fascinating. We each came up with these numbers. I want to do more of these kind because I've learned so much and we had this whole conversation about, we came to a place about why a young consumer is going to think differently than someone that's older and it's about their outlook. And I think that was pretty interesting. Thank you, guys, for today.

Lauren Ashcraft (19:37):

Thank you. We'll try to be more uplifting next-

Rob Rubin (19:41):

Yeah, next one's going to be funny. We're going to have many laughs in the next one.

Lauren Ashcraft (19:41):

Yeah.

Grace Broadbent (19:44):

I don't know if debt jubilee is the laughing one, but we'll have to find something.

Rob Rubin (19:47):

We're going to make it funny.

Lauren Ashcraft (19:49):

I know. Whenever you said jubilee, I was like, that sounds fun.

Rob Rubin (19:53):

It sounds amazing, right? It's such a fun name.

(19:56):

I want to thank everyone for listening to the Banking and Payment Show and I also want to thank our editor Victoria.

(20:01):

Our next episode is on May 13th, so be sure to check it out. Maybe it's going to be on debt jubilees. See you then. Take care.

Lauren Ashcraft (20:09):

Bye.

Grace Broadbent (20:10):

Bye, guys. Thanks.