A Perspective Study on Whether Neobank’s Innovations Cater to Gen Z’s Financial Habits

Neo banks also known as “challenger banks”, are digital-only banks that have entered the banking sector posing a challenge to traditional banks, with their technologically integrated and innovative services. Their digitally advanced banking facilities mainly appeal to the tech-savvy Generation Z (Gen Z). The study focuses on understating if neo banks’ modern services resonate and satisfy the financial habits of GenZ. Their generation has unique financial habits and is one of the main target audiences of neo banks, they also make up a good percentage of the global population and are emerging to be important industry stakeholders, making it necessary for neo banks to analyze them, to understand how to satisfy their needs and make them loyal customers and also fill in the gaps that pose as challenges in penetrating the GenZ. The research is based on secondary data obtained from journals and articles, the thorough literature analysis has helped understand the different innovations of neo banks and also the financial habits of GenZ, respectively. The findings indicate that the operations of neo banks appeal to GenZ however, there are a few factors like parental influence, trust deficit, unawareness, dominance of traditional banks, etc. that hinder GenZ from being potential customers of neo banks. These findings help neo banks to adapt to GenZ’s financial habits and work effectively towards acquiring them as customers. Therefore, we understand that Neo banks are well-positioned to serve the GenZ, but need to get over few major hurdles to attract and sustain them as customers.