Unlocking Gen Z Banking: How Community Institutions Can Win by Engaging Their Parents

Financial institutions are struggling to connect with Generation Z, but a surprising strategy may hold the key: targeting their Gen X parents. This counterintuitive approach could help community banks and credit unions reverse their declining share of Gen Z’s primary relationships.

The Challenge: Despite major investments in digital tools and social media, community institutions have seen their Gen Z market share drop significantly. Recent data shows they held just 9% of Gen Z’s primary financial relationships in 2025, down from 19% just two years earlier. This decline persists even as nearly three-quarters of Gen Z members have reached adulthood.

The Insight: The bridge to Gen Z may be Gen X. “Many financial institutions already have strong relationships with Gen X, but they struggle to build the same connection with younger generations,” explains Lee Wetherington, senior director of corporate strategy at Jack Henry. Leveraging these existing Gen X relationships offers a new pathway to understand and engage Gen Z.

Understanding the Generational Connection

Both generations value independence but express it differently. While Gen X is known as the self-reliant “latchkey generation,” Gen Z—raised in a more connected world—balances digital self-service with strong parental guidance. Over 60% of Gen Z individuals rely on their parents for financial advice, creating a unique opportunity for institutions already serving those parents.

Trust and authenticity form another common ground. Gen Z consumers show relatively low trust in traditional banks but haven’t abandoned them entirely. They still need physical branches for complex transactions while handling daily finances on mobile devices. This mirrors Gen X’s skepticism toward impersonal marketing—both generations respond to “real people saying real things” rather than generic promotions.

Practical Strategies for Engagement

Start with your existing Gen X base. Instead of competing with fintechs on national advertising, use channels Gen X frequents to introduce services that address Gen Z needs.

Develop family banking structures. Create products around financial activities already happening between parents and children. Co-managed accounts that facilitate money transfers and expense monitoring can naturally bring younger users into the institutional relationship.

Build continuity through youth accounts. These accounts establish early relationships while parents retain oversight. Features can include allowance management, savings goals, and even parent-child lending with interest—all while providing financial education.

Plan for the long-term relationship. Design experiences that evolve with major life transitions. A teenager with a checking account today might be running a side business tomorrow. Identifying and supporting these early entrepreneurial activities can convert a family-linked account into an independent, lifelong relationship.

Focus on problems, not products. Address financial challenges customers are trying to solve rather than simply promoting checking accounts or loans. This problem-first approach resonates with both generations.

Utilize shared media channels. Short-form video platforms like Instagram and YouTube can reach both Gen X and Gen Z, creating opportunities for coordinated, authentic messaging that highlights real financial solutions.

The traditional model of generational banking may be fading, but by strategically engaging Gen X parents, community institutions can create new pathways to building meaningful relationships with Gen Z.

Source: thefinancialbrand.com