Gen Z are switching to app-based banks with better perks – not interest rates

Gen Z have made their minds up - when it comes to banking, it’s the little perks that count. New research from Pay.UK shows younger customers care far more about day‑to‑day rewards than interest rates or long-term milestones.

Nearly three-quarters (72%) say a “good bank” is one that gives something back on everyday spending.

John Dentry, Product Owner at Pay.UK, said: “Gen Z aren’t looking for complex financial products or rewards for the distant future — they want value day to day.

“Big milestones like owning a home, getting married or starting a family feel further away for many, especially with today’s cost-of-living pressures.

“Small, practical perks that fit everyday spending help people feel rewarded and supported.”

About half of younger people say they’d switch bank accounts if they found one with better perks. But what perks are they looking for exactly?

Everyday perks matter more than interest rates

The study of 1,004 young adults aged 16-28 found that more than half value free coffees, food discounts and cashback more than interest rates. Around 2 in 3 say deals on small indulgences help them manage money better.

In other words, if their account can shave a bit off lunch, a cinema ticket, or the weekly shop, that's what they want.

Digital-first, app-based banks are the preferred option

Digital ease now defines what a “good bank” looks like. Two-thirds (66%) of Gen Z want rewards they can get straight from their banking app. More than half (56%) say digital-first banking is their top priority.

This shift explains why app-based rewards and gift cards are becoming standard. Here at thinkmoney, for example, our SmartPlus customers get access to PlusSave^.
PlusSave offers discounted gift cards at hundreds of retailers. Fancy a coffee? Starbucks is currently 11% off and Costa is 10% off. Cineworld gift cards come with 10% off.

Our resident consumer expert Vix Leyton saved £12 on a night out at All Bar One back in December. A night of cocktails and nibbles that would have normally cost her £100 only cost her £88 instead. Plus, she said, it was so quick to load up the gift card on her phone, she did it while in the queue.

And those gift card savings can add up fast. Some thinkmoney customers save hundreds of pounds a year without changing their habits. Just buying the same things, but cheaper. For a lot of people, those everyday savings have more value than dwindling interest rates on savings accounts that take ages to build up.

^Offers are subject to change and may vary. Check the thinkmoney app for the latest offers.

Gen Z banking – key takeaways

Gen Z have set the pace. They want simple, instant value; not promises for ten years down the line. A cheaper coffee, money off a night out, or a few pounds saved on the weekly shop goes further for them than ever-falling interest rates on savings.

And with app‑based accounts like thinkmoney making it easier to grab these perks in seconds, younger customers will happily switch to wherever they feel the most supported.