Over the past few years, I’ve had more and more of my financial services clients ask me for data and insights around Gen Z. As one of the largest and arguably most influential generations in the U.S. today (accounting for about 20% of the total population), there’s a strong desire to better understand how this generation differs from other generations. More specifically, how this generation thinks about and spends money.
Born into a digital world, Gen Z has always had immediate access to a wealth of information at their fingertips. This free flow of information has given Gen Z the ability to become quite knowledgeable about finances and money more quickly than some of their generational cohorts. But financial knowledge does not necessarily equate to financial confidence. In fact, given the strong financial headwinds this generation has faced like the Great Recession, the global pandemic, out-of-control student debt, exploding real estate prices, etc. it’s not surprising that Gen Z feels insecure when it comes to their relationship with money. This insecurity, as well as how Gen Z views and interacts with the world, greatly shapes their approach to finances.
Here are four unique ways Gen Z thinks about and approaches finances compared to other generations.
1. Never Enough Money
Given that they are at the beginning stages of their career (or at least starting to think about it), it’s no surprise that Gen Z is worried. They are worried about the cost of living, taxes, finding a job, inflation, building credit, and never being able to afford a house. They need someone to reassure them that, if the right steps are taken, they will be just fine.
2. Mobile Banking and FinTech
As the digital-savvy consumers they are, Gen Z is all about mobile banking, P2P money transfers, and shows a strong readiness to adopt FinTech solutions which all build on their needs of convenience, cost savings and a seamless user experience. Financial services companies will need to provide and speak to these offerings in order to attract this younger generation.
Born into a digital world, Gen Z has always had immediate access to a wealth of information at their fingertips. This has given Gen Z the ability to become quite knowledgeable about finances and money more quickly than some of their generational cohorts. But financial knowledge does not necessarily equate to financial confidence.”
3. Social Media
No surprises here, but Gen Z takes to the internet, specifically social media, to research before they buy. However, they’re researching more than just the product or service itself, they’re also researching the company selling it to ensure it aligns with their values and beliefs. This goes for financial services and products too. Brands need to be intentional on how they present themselves on social media.
4. Sustainable Investing
Gen Z prefers to work with companies that are transparent and authentic, companies that live out the messages they communicate rather than just blow hot air without action to back it up. This is particularly true when it comes to environmental, social, and governance (ESG) investment options, which Gen Z shows greater interest in. Financial services companies need to ensure that the brand image they’ve cultivated is backed up by actions that support it in real ways.
Gen Z presents a new and exciting opportunity for financial services companies to capitalize on, assuming they know how this generation thinks about and engages with money.
Want to explore ways to connect with Gen Z audiences?
