Gen Z are the much talked about, much imitated cultural leaders of today, who will form the financial services customers of tomorrow.
Despite high levels of love for brands that help them spend, Gen Z should not be pigeonholed as simply frivolous with money.
Now entering adulthood, careers, and with increasing spending power, our BrandVue and the weekly Consumer Tracker data, we highlight how Gen Z’s financial habits offer a unique glimpse into the financial services world of the future.
Gen Z, aged 18 to 24, are often touted as the most ‘radical’ generation to date, but they still hold the traditional savings goals of older generations, 63% saving to buy a property. However, owning property is arguably even further out of reach for this generation than Millennials, and for Gen Z, who have grown up with social media and fast consumerism, immediate gratification may be more tempting than saving long-term for an impossible goal. 51% of Gen Z are also saving for non-essentials like clothes, games and makeup. Whilst similar to younger Millennials in this regard, Gen Z are distinct in their habits – this is a generation raised on clothes ‘hauls’, makeup how-to videos, fast fashion and social media ‘outfits of the day’. As such, Gen Z face enormous pressure to spend – and this is evident in the brands they love the most. Payment platforms like PayPal, Apple Pay and Klarna make up the majority of Gen Z’s top loved financial brands, to an extent that isn’t seen in any other generation.
Despite high levels of love for brands that help them spend, Gen Z should not be pigeonholed as simply frivolous with money. In fact, Gen Z are one of the largest proponents of new methods of saving – 10% of Gen Z invest into cryptocurrency, 19% use an app to invest in stocks and shares, and 11% use an AI investment app like Plum or Cleo – these are far higher adoption levels than seen in Boomers. Gen Z are true digital natives and have democratised the world of investing through social media, investment influencers and knowledge sharing forums like the recent GameStop Reddit thread. As such, they are strong adopters of new digital ways of managing money.
In this way, Gen Z expect all aspects of financial services to provide a digitized, mobile and instantly accessible user journey. When surveyed, 66% of Gen Z said that access to online or mobile app banking is important to them when opening a current or savings account, and 62% think app features are an important factor. More than simply digitising their offering, financial services brands need to consider the needs and habits of young people when building their product. Monzo, for example, did just this, offering bill splits, easy money transfers with friends, and multiple savings pots split by goals such as holidays. As such, it was rated their 6th most loved financial services brand.
Crucially for Gen Z, digital tools that help them easily spend, save, and manage money, as effortlessly as they can message their friends, will build the strongest loyalty in this group as they start to become financial services customers.
As Gen Z’s accumulate increased spending power, financial services brands need to ensure they understand what motivates the Gen Z audience to fully engage and meet their future needs….