Why Youth Banking Is Set to Boom by 2025

The youth banking market has seen growth over the past decade, but it still has a long way to go. Over the years, banks have focused most of their efforts on chasing customers with the most money. Higher net worth customers can increase bank deposits, are willing to take advantage of more products the bank offers, and generally have a lower risk of default. Children and teenagers, however, are not very attractive in a market, because they usually do not add many assets and can come with additional headaches, such as special regulatory requirements. .

As such, 2025 will be a breakout year for youth banking, which is set to experience significant growth as enabling technologies, changing customer needs, and opportunities to market creates a perfect storm.

FinTok makes finance cool

Short-form video platforms like TikTok, YouTube, and Instagram have transformed from places to post fun dance videos to hubs for financial education and empowerment. This is especially true for Gen Z users, who spend more time on these social platforms. The financial area of ​​TikTok, FinTokhas become a channel where influencers simplify financial concepts, share savings and investment tips, and make financial education fun.

Banks and fintechs have yet to fully embrace this style of communication, largely due to regulatory implications. Although they are trying to reach clients on social platforms, however, new content is working to promote new interest in finance among the younger generation. In 2025, banks that adopt the FinTok trend can stand as financial partners for a new generation of financially interested consumers.

Financial education is improving

The US has historically been bad at integrating financial literacy into education systems, but that is changing rapidly. Schools, nonprofits, fintechs, and banks are increasingly prioritizing financial education, integrating it into curricula and offering free resources to parents and children. We’ve also seen the rise of apps that encourage learning about saving, budgeting, and investing. For banks, this means that now in 2025, young consumers not only have an interest in the financial ecosystem, but they also start with a solid foundation and a greater appetite for digital tools. financially.

Youth-centric segments are on the rise

Gone are the days when “youth banking” meant a basic savings account with parental supervision. In 2025, you can expect to see these platforms integrate a wider range of features, including gamified savings goals, allowance management, secure spending controls, and even investment tool tailored to teenagers.

Banks and fintechs that prioritize these youth-centric tools with intuitive design elements will create products that are stickier. Many are doubling down on youth-friendly offerings by partnering with companies like Greenlightwhich partners with a wide range of banks, including US Bank, to empower families with financial tools.

Youth banking tools offer a way to diversify

With the increasingly crowded fintech scene, youth banking tools provide an opportunity for diversification. By offering new, unique features for traditionally underserved children and teens, companies can stand out while capturing an untapped market share.

Youth-oriented offerings also serve as a way to involve the whole family, as parents are likely to appreciate tools that not only educate their children about money, but also offer a starting point for them to build their financial situation. As the banking landscape becomes more crowded in 2025, we can expect to see more youth tools serving as a differentiator.

A massive transfer of wealth is underway

The great wealth transfer, the upcoming movement of $84 trillion in wealth from Baby Boomers to Millennials and Gen Z is one of the most significant financial changes of our time. In fact, the funds transfer continues as some Millennials and Gen Z have started receiving inheritance. While organizations seek to capture this wealth, marketing to children and teenagers will allow companies to capture some of the riches from those who are just beginning their financial journeys.

Millennial parents are looking to break the cycle

Millennials experienced financial hardship during the 2008 recession and some are still reeling from a combination of that recession and heavy student loans. The majority of Millennials are now parents, and because many feel they lack education and financial opportunities, they are determined to equip their children with better financial habits.

Unlike previous generations, many Millennials are actively seeking to teach their children about money management from a young age. Youth banking platforms, with features such as savings goals and educational resources, align well with this parental mindset.

For banks and fintech, 2025 is a good time to take advantage of the double opportunity. Not only can they capture the next generation of customers, but they can also strengthen relationships with their existing customer base of Millennial parents.

Photo by Kindel Media

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