What Fintechs Got Right About Life Stages — and How Traditional Banks Can Catch Up

 

Executive Summary

• While traditional banks try to be everything to everyone, specialized apps like Greenlight and Chime dominate by targeting specific life stages with laser focus.
• Half of new bank accounts now go to digital-only institutions — up from just 36% three years ago, showing how quickly traditional banks are losing the customer acquisition battle.
• Forget “Millennials killed branches” thinking; what really drives banking behavior is whether someone is navigating their first paycheck, buying a home, or planning retirement.

If you work in financial services marketing, you probably know a lot about generational targeting. Millennials killed branches. Gen Z hates credit. Boomers are loyal. Gen X doesn’t get talked about enough. Every week brings a new dissection of the quirks, values, and digital expectations of some age-defined tribe. And every institution is told to adapt or risk irrelevance.

Generational insights matter, of course, but the primary driver of financial behavior isn’t the year someone was born — it’s the financial challenges they face at a given moment in life. The practical goals and milestones people encounter as they move from childhood to adulthood to retirement often matter more to their financial relationships than whether they mailed checks or used Venmo in college.

For banks and credit unions, understanding life stages matters, because this is one of the major ways in which fintechs have gained ground over the past decade and more. Dozens of ventures — like Greenlight, Chime, Rocket Money — offer focused, stage-specific offerings that are pulling banking relationships, current and future, away from traditional institutions. By 2023, nearly half of all new accounts — 47%, up from 36% just three years earlier — were being opened with fintechs or digital-only banks, a clear signal of how much ground has been lost. And the trend continues.

The breakthrough insight is that banks and credit unions are in fact uniquely well-positioned to meet this challenge, by bringing a lifecycle banking strategy to market. To do so requires them to steal a page from the fintechs’ playbook while also doubling down on their own strengths. And to execute effectively, they need a clear view of what each stage entails — from the financial needs it surfaces to the engagement opportunities it creates — and how those stages interconnect, both operationally and over the arc of a customer’s life.

Connecting the Dots

Responding to the lifecycle opportunity starts with recognizing that the financial needs of a 12-year-old, a 22-year-old, a 42-year-old, and a 72-year-old are vastly different. A recent college graduate starting their first job needs entirely different services than someone in mid-life who is remarrying and blending two families. These needs span not just products, but also the type of support, guidance, and experience required at each stage.

Traditional segmentation by age or income still has value, but only if applied with more precision and allowed to evolve over time. What matters most is understanding the financial goals and decisions people tend to confront at different points in life — and meeting those needs in ways that feel timely, personal, and easy to access. Institutions that can deliver that kind of relevance stand to gain deeper engagement, stronger retention, and a more durable competitive edge.

Of course, life stages don’t always unfold in a linear or predictable fashion. Someone might start a family at 27 or 57, learn to budget at 20 or 50, or retire at 47 instead of 67. But for planning and engagement purposes, age-based cohorts offer a useful starting point. Rather than anchoring on generational identity, lifecycle banking focuses on the financial moment — using age as a proxy for understanding typical needs while still allowing for flexibility. This approach enables institutions to support customers across a full lifespan, strengthening loyalty across generations.