Introduction – The Wealth Transfer

We are currently witnessing the greatest intergenerational wealth transfer¹ in history. As millennials are poised to become the primary wealth holders, it’s crucial for financial institutions to recognize how they differ from baby boomers, Generation X (Gen X), and Generation Z (Gen Z) when crafting appealing banking propositions for their digital banking solutions. This period is particularly noteworthy, being fifteen years post-Great Recession, as millennials, who matured during that time, now face rising inflation as adults.

In this year’s Generational Trends in Digital Banking Study², the research explored generational differences in financial trends, beliefs and preferences, with a focus on millennials. The study included a total of 1,500 U.S. participants ages 22-65 weighted to the 2020 U.S. Census for age, region, gender, and ethnicity, who currently have a bank account and are active in digital banking³ (check accounts, transfer funds, pay bills online, etc.), with an additional 250 participants who are employed full-time or part-time and 250 participants involved in the gig economy.

This study was designed to equip financial institutions with the insights and expertise needed to foster meaningful engagement, loyalty, and relationships with their account holders, and drive intentional strategies around product development. For millennials, an outstanding digital banking experience is essential, where the digital banking platform functions equally as a sales and service channel. To stand out, banks and credit unions must use data to offer personalized banking⁴, becoming data-informed digital bankers of the future.

In partnership with The Center for Generational Kinetics⁵, the study revealed many insightful findings around the impact of rising interest rates, attitudes toward new or different financial providers, opportunities presented for regional and community financial institutions (RCFIs) and the role of data in creating personalized experiences.

The Five Core Insights 

• They are navigating the fluid economy. While millennials have faced numerous defining events, from 9/11 to COVID-19, they are challenged with rapidly rising interest rates just as they are advancing in their careers. About 73% of millennials (ages 28-44) report that rising interest rates have significantly impacted their standard of living, more than Gen Xers and baby boomers. Additionally, 65% of millennials feel they are living paycheck to paycheck. The traditional “American dream” is being redefined, with over a quarter of millennials viewing homeownership as a hindrance to building wealth.
• RCFIs can grab millennials now. Millennials, aged 28 to 44, form a significant part of the workforce and population, making this a key time for wealth building, starting families, and buying homes. The national study shows that half of millennials use major national banks or credit unions, while the other half prefer regional or community institutions. This means millennials are open to various financial providers, and RCFIs need to adapt to their preferences and offer personalized banking plus innovative services. The study found that 30% of millennials plan to increase their number of financial providers in the next year, significantly more than Gen Xers (14%) and baby boomers (8%).
• Millennials as account holders can lead to increased product adoption. The significant intergenerational wealth transfer from baby boomers to millennials is rapidly approaching. As millennials become the dominant workforce generation, it is crucial for RCFIs to prioritize gaining millennial market share. Millennials are 56% more likely to expand their relationship with their primary financial institution over the next year compared to older generations.
• It’s all about the digital banking experience. Millennials represent a significant opportunity, being open to banking with RCFIs and eager to buy new financial products. To capitalize on this, the focus needs to shift to the experience millennials encounter when using digital banking solutions. For millennials, 58% would switch providers for a better digital experience, and 57% would engage more with their finances if digital banking were easier to use. This emphasizes the critical connections between digital banking platforms and millennials’ banking preferences.
• Become a data-informed digital banker. Personalization and relevant product recommendations are crucial for retaining and growing millennial relationships. RCFIs can differentiate themselves by becoming data-informed digital bankers. With the use of data and artificial intelligence in banking, relevant product recommendations drive deeper engagement with millennials compared to other generations. One out of two millennials are comfortable with artificial intelligence (AI) processing their financial data for a better banking experience and 55% desire a more personalized digital banking experience.

Digital Banking Solutions + Data

Millennials, the future wealth holders, have more financial products with their institutions than any other generation and are open to adding more providers in the next year, presenting a growth opportunity for banks and credit unions. The essential step to engage millennials is clear: invest in a better digital banking experience.

Leveraging data and AI, RCFIs can use their digital banking platform as both a sales and service channel to build lasting relationships with millennials and position themselves as data-informed digital bankers.

This is an exciting time for financial institution leaders to seize the opportunities millennials present. Acting now will differentiate banks and credit unions, maturing their digital banking solutions to grow with millennials as they increase their wealth, benefit from the upcoming wealth transfer, and expand their banking relationships.

Sources

1 Smith, Talmon Joseph. “The Greatest Wealth Transfer in History Is Here, with Familiar (Rich) Winners.” The New York Times, 14 May 2023, nytimes.com.

2 Alkami Technology. “Generational Trends in Digital Banking Study.” Alkami Technology, 22 May 2024, alkami.com.

3 Alkami Technology. “Southland Credit Union Uses the Digital Banking Platform to Reimagine Member Experience.” Alkami Technology, 5 Feb. 2026, alkami.com.

4 Larson, Caitlin. “Why Personalized Banking Matters: A Guide for Banks & Credit Unions.” Alkami Technology, 14 Mar. 2025, alkami.com.

5 The Center for Generational Kinetics. “The Center for Generational Kinetics: Insights, Research, Speaking.” The Center for Generational Kinetics, genhq.com.