By Jennifer Sanchis, Insights Consultant at CARMA
UK banks have modernised their products, streamlined their apps, and fine-tuned their digital experiences. But many fall short when communicating with Gen Z customers. Institutions continue to focus on features and functionality, but the next generation of customers is looking for something deeper: values, culture, and authenticity.
Our recent analysis of public opinion towards five major UK banks: Lloyds, HSBC, NatWest, Revolut, and Starling Bank, across the reputational pillars of products & services, performance, conduct, vision, culture and sustainability, reveals a disconnect between what Gen Z want from banks and how banks communicate their values.
Product and services scores across these banks are strong, Revolut leads with 56, followed by Lloyds (49), HSBC and Starling (both 47) and NatWest (42). However, culture and sustainability scores lag by comparison, with the five banks scoring an average of 21.8 and 21.2 respectively. These numbers demonstrate that while banks are building smarter tools, they are failing to communicate their values and build trust.
This trust gap runs deeper than UI design or cashback offers, into perceptions of workplace conduct, ethics and leadership accountability. Traditionally, sustainability and culture are less important to customers than products & services, performance and conduct, which may explain why banks have not consistently and clearly included them in their communications strategies. However, younger audiences are placing more and more importance on issues such as sustainability, with 44% of those aged18-34 placing significant importance on it, compared to just 16% of those aged 55+. The same is true of a banks culture, with 39% of those ages 18-34 placing significant importance on it, compared to 20% of those aged 55+.
Gen Z, born into economic volatility and climate crisis, doesn’t just evaluate brands on what they do; they scrutinise how they do it. They expect consistency between internal values and external messaging, and banks that still treat culture, sustainability, and inclusion as “soft” factors are missing the point.
Part of the problem is perception, with traditional banks struggling to meaningfully communicate cultural reform or ethical leadership. Digital challengers like Revolut and Starling, which have positioned themselves as fresh alternatives to legacy banking, should theoretically have a head start with younger audiences. But that advantage seems to be slipping. While Revolut leads with a culture score of 27, it is followed closely by HSBC with a score of 24, suggesting that without substance, disruptor banks risk becoming indistinguishable from the incumbents they intend to challenge.
The retreat from DEI and ESG commitments
This challenge comes at a precarious time. A recent report from CRIF shows that over half of UK financial professionals expect ESG (Environmental, Social and Governance) and DEI (Diversity, Equity and Inclusion) policies to decline in importance. Several major banks are already retreating from high-profile sustainability commitments. While Barclays and NatWest have removed climate targets from their executive bonus criteria, and HSBC has delayed its net-zero deadline by two decades.
To the boardroom, these may be practical decisions. To Gen Z, it looks like betrayal.
This generation grew up with Fridays for Future, Black Lives Matter and #MeToo. They have an innate radar for performative messaging and little patience for institutions that say one thing and do another. If ESG and DEI commitments are quietly dropped, or replaced with vague platitudes, the reputational fallout won’t be limited to protests or social media backlash. There will be a slow erosion of trust; silent, invisible and hard to recover from.
Financial institutions need to stop underestimating the reputational cost of cultural disengagement. Gen Z is not just tomorrow’s customer base, they are tomorrow’s workforce, tomorrow’s leaders and today’s most connected generation. Their influence already extends beyond their wallets. They shape trends, amplify stories and hold institutions to account in real-time.
So how can banks start to rebuild this fragile trust?
First, culture must stop being treated as an internal HR function and should instead be elevated to a strategic priority. This means more than just publishing a diversity report or celebrating Pride Month. It means ensuring leadership teams reflect the communities they serve, committing to long-term ESG goals, and being transparent about progress. Authenticity is key.
Second, banks need to rethink how they communicate their purpose. Today’s consumers are less interested in slogans and more interested in substance. Gen Z doesn’t want to be sold to; they want to be shown. That could mean publishing pay gap data, engaging with community finance initiatives, or being honest about past failures and how the organisation is learning from them. Reputation is not built through messaging alone; it’s earned through action.
Third, they need to close the empathy gap. This generation is coming of age at a time of financial uncertainty, from rising student debt and inaccessible housing to job instability and climate crises. In this context, banks that fail to reflect these realities risk appearing out of touch. But empathy doesn’t just mean having good intentions, it means designing products and services that genuinely help young people navigate these challenges. A bank that can combine real financial support, like budgeting tools, ethical investment options and savings incentives, with a culture that shows it understands Gen Z’s values, like fairness and transparency, can build long term trust and loyalty.
Gen Z doesn’t expect perfection, but they do expect effort, transparency and consistency. If banks want to secure the loyalty of this generation, they need to stop treating culture and sustainability as afterthoughts. Banks that fail to close the gap between performance and purpose may find themselves delivering best-in-class services to an audience that simply isn’t listening
Why banks are losing Gen Z and how to win them back
