What Gen Z Wants From FinTech
Gen Z’s New Approach to Finance
81% of Gen Zers perceive money as a major stressor. If you’re thinking that this generation is too young to be concerned about finance yet, you’re wrong: Gen Z is uniquely positioned to be money aware—and finance savvy—from the get-go. Only knowing a world with social media, Gen Z is accustomed to constantly having transparency into peoples’ personal lives; and this includes insight into individuals’ wealth and purchases. Moreover, the digitalisation of commerce has resulted in children getting their bank accounts at younger ages. All this combined has resulted in Gen Z becoming financially aware and engaged at a much earlier age than their predecessors. With the generation possessing over $143 billion in spending power, understanding the way that they are approaching finance is crucial for any financial institution or fintech. Read on to learn more.
Fin-fluencers Shape the Game
Gen Z’s are smarter financially than generations before, and this is a result of the wealth of information they have at their fingertips—well, on their phones. Financial advisers, as well as those who are just good with money, are storming onto social media platforms such as TikTok, YouTube, and Instagram to share their wisdom and tips. On the receiving end of these platforms are Gen Zers, who are absorbing financial advice with enthusiasm. On TikTok, the hashtag #finance has over 3.7 billion views. There are a whole host of fin-fluencers (finance influencers) sharing content on personal finance, from Humphrey Yang, who has 2.3 million TikTok followers, to Clare Seal on Instagram, who shares tips and tricks she learned from paying off over £27k in debt in a year. With their new awareness of how to save, invest, and best play the game of finance, Gen Zers are educated and ready to make the most of their money from early on.
With Gen Z having so much financial power, and them relying on social media, the well-being world of finance is subject to trends. This year’s rise and fall of various cryptocurrencies have been a result of their success on social media. Dogecoin saw its value rise 40% after it went viral on TikTok. The Reddit-inspired Gamestop spike demonstrated the potential of social media to upend the stock market, worryingly so for some.
Yet, trends can also promote smart personal finance and are a great means for fintech brands to promote their products. For example, money management app Plum, partnered with fin-fluencer MrTradingRobot for their participation-based marketing ‘52-week savings challenge’. As part of the trend, users were encouraged to put away incrementally small amounts into the app. From these practices, Gen Zers have learnt to invest without putting everything at risk. When asked what they would do with £1,000, 72% of Gen Zers said they would save it in the bank, in comparison to 55% of millennials, according to an HSBC survey. Gen Zers are also more likely to seek financial advice: 80%, in comparison to 60% of Baby Boomers and 64% of Gen X investors.
New Fintechs Making Smart Finance Easier than ever
New fintech’s are responding to this newfound financial maturity of Gen Z by making saving and investment more accessible via digital apps. Rather than just targeting parent-controlled digital wallets at the Gen Z audience, startups are most successful when facilitating safe, but successful, financial freedom for young people. Gen Z targeted neobanks, such as GoHenry and Revolut, as well as Step in the U.S. have gained particular traction. Investing apps like Robinhood and Webull are also popular with young people, enabling them to trade stocks and cryptocurrencies with no fees. These new platforms are helping Gen Z to realise their potential as the most financially savvy generation yet.