Welcome to Thoughts on the market. I'm Betsy Grassick, Morgan Stanley's US

large cap banking analyst and Morgan Stanley's global head of banks and

diversified finance. Today I want to fill you in on some really interesting work

that we have done with our US chief economist

Ellen Sentner on the millennial and Gen Z demographics.

We'll dig into the ways we expect these two outsized generations will

transform the way we bank in the coming years. So let's get to it. There's a bit of

irony that today's high school students have an enormous portfolio of online accounts

ranging from social media to music streaming, but there's still one account they cannot

have without their parents signature and that's a bank account.

This Generation Z could actually remake the consumer financial landscape in the coming years.

Let's unpack how this will affect consumers and the banking industry.

First, a bit of background.

I joined Ellen in her outlook on how Gen Y and Z are changing industries in the US.

In 2019 Gen Y, also called the millennials,

became the most populous generation, overtaking post-war baby boomers and right behind them is Gen Z who will overtake

millennials by 2034. So here we have two outsized generations many in the key

25 to 40 year old sweet spot for borrowing and

financial services as they set up households, have children, and buy homes.

And both of these generations operate in a tech-savvy mobile first world.

To them, the phrase online banking is almost redundant.

After all, what's not online?

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