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Engaging Gen Z in a digitalised world

What more can financial services providers do?

A survey conducted with PIMFA explored Gen Z's financial habits, revealing their digital-first approach and expectations for seamless online experiences.

Isabella Armstrong Consultant 26/02/2024

Gen Z (born between 1997 and 2012) are a generation with a reputation for being digital-first. Their lives are both consumed and driven by technology – they have never known life without it. So, what incentivises Gen Z when it comes to selecting financial services providers, is it all about cost and price hacks, or are seamless experiences, both digitally and physically, more important? And crucially, where do they seek information from? The onus is on financial providers and institutions to provide quality education to younger generations so they can make informed financial decisions.

We spoke with 500 consumers as part of a recent survey we conducted in partnership with PIMFA (Personal Investment Management & Financial Advice Association) for their annual Under 40 Leadership Committee, exploring key themes of financial literacy, sources of advice and planning.

Arguably, the commoditisation of financial services has led to decreased customer loyalty across the sector and adds weight to the importance of other factors, such as price. For Gen Z, in today’s fast-paced digital world, their minimum expectation is that of a seamless online and mobile app experience. So, the real question is how providers can stand out from the crowd for this audience.

Regardless of how much banking services are commoditised, there are ways to add value to the consumer’s experience – trust and decision making are somewhat driven by the content consumed. Therefore, marketing teams must produce valuable outputs that keep them top-of-mind.

Given the level of competition across the market, and the rise of fintechs, the way providers can consolidate their relationship with Gen Z customers may be by building deeper loyalty. They could become their trusted point of advice. Gen Z have an appetite for readily available information, customisable experiences as well as improving their financial literacy.

Being a digitally driven generation, a majority of Gen Z use digital channels, including social media, as a platform for self-education about financial services.

The most common source of information for financial research used by Gen Z is official government websites (over 2 in 5), while 37% use consumer websites such as MoneySavingExpert. Partnering with government bodies and consumer websites to collaborate on content would be an effective way to engage with this audience.

Alarmingly, 1 in 3 Gen Z seek information from social media personalities. While Gen Z recognise the unreliability of social media content on financial advice, they still actively engage with it when seeking information. When asked how much they trust these ‘financial influencers’, almost 1 in 3 Gen Z admitted they ‘do not trust’ these sources while 2 in 5 do.

In fact, among those aware of social media personalities sharing financial content, almost 1 in 3 Gen Z admit to making a financial decision based on a ‘financial influencer’s’ content and would happily do so again.

Financial service providers need to be more active in sharing content across the platforms most used by Gen Z. Providers should aim to raise their profile on mainstream social media channels such as Instagram, TikTok and Twitter (now ‘X’) in order to disrupt the existing market of unverified information.

Despite attempts by regulators to control financial advice on social media, they are unlikely to be able to fully monitor content that is published. The best alternative for financial services providers to build awareness and trust among Gen Z is to produce their own quality content that speaks the same language as these consumers. This could include partnering with creators who have the necessary qualifications or are sharing legitimate information. As this generation of the population matures, their buying power and wealth will keep increasing – now is the time to act in forming relationships with this audience.

To find out more about the work we do for wealth management and financial services providers or to speak to one of our specialists, please click here.

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