Banks Exploiting Wealth Transition from Baby Boomers to Generation Z
Banks Position Themselves as Family Banks for Generational Wealth Transfer
In a bid to capitalize on the upcoming generational wealth transfer, banks are repositioning themselves as family banks, focusing on deepening senior banking relationships and deploying digital banking services that enable legacy planning and multigenerational engagement.
According to Dylan Lerner, Senior Analyst in Digital Banking at Javelin Strategy & Research, this shift in strategy is not just about managing seniors' money but also about reaching the younger generations through their family relationships. Lerner suggests a concept called "youth banking that's built for parents", emphasizing the need to engage the family dynamic to own a family banking relationship.
Banks are moving beyond transactional services to orchestrate the wealth transfer process itself, guiding families through complex and emotional decisions such as estate planning, legacy protection, and inheritance management. This builds deep trust and loyalty across generations.
Digital tools are used not to replace personal relationships but to organize financial details, deliver timely advice, and coordinate legacy planning processes at scale—helping banks become irreplaceable in managing generational wealth.
Banks and advisors encourage the use of customized estate planning solutions, such as trusts like credit shelter trusts and generation skipping trusts, to optimize tax efficiency and wealth preservation, aligning with families’ long-term goals for wealth sustainability.
Recognizing that younger heirs (Millennials, Gen Z) prioritize values alignment and financial literacy, banks are targeting these groups through tailored financial education, community reinvestment, and socially conscious outreach to retain next-gen clients who might otherwise switch banks.
Community banks, in particular, are focusing on strategies to prevent heirs from moving inherited assets away, by increasing their offerings' relevance to younger generations and strengthening multigenerational relationships.
Seniors are more open to digital banking than many banks realize, with continued adoption of digital banking among seniors. However, the industry's blind spot is not providing seniors with other value propositions beyond ease of use. Banks have the opportunity to create bigger experiences for their senior clients, such as fostering independence or bringing in family members to meet their needs.
Some banks are implementing entitlements, allowing others access to digital banking accounts, a tactic more common in business banking and now used for caregiver banking. This strategy allows seniors to have limited access to digital banking and financials to help them pay bills, prevent scams, and ensure financial stability.
In summary, banks are combining relationship-focused legacy advising—with senior clients and their heirs—with digitally enabled tools to navigate and capture the historic wealth transfer from Baby Boomers to descendants, ensuring they become trusted multigenerational partners rather than merely transient service providers. A holistic strategy is needed for family banking, as simply plugging and playing with offerings is not enough. To become a family bank, a bank must build a relationship with the child, who may become the primary banker in their later years.
- Banks are utilizing digital technology to enhance personal-finance management and foster multigenerational engagement, positioning themselves as family banks to facilitate generational wealth transfer.
- The strategy of banks in rebranding as family banks involves not only managing seniors' funds but also engaging with younger generations through family relationships and tailored financial education, aiming to own family banking relationships.
- To build deep trust and loyalty across generations, banks are offering digital tools to organize financial details, deliver timely advice, and coordinate legacy planning processes, all while emphasizing relationships and family dynamics.
