Gen Z financial trends differ massively from their predecessors. Having grown up in a fully digital world, many have different attitudes to technology, making them more open to the idea of its integration and the role it can play in safeguarding and managing their finances.
Firms must understand what these evolving preferences are in order to secure Gen Z loyalty. In light of this, Finotta, a provider of embedded fintech for digital banking, published its new whitepaper, The Next Generation: Financial Futures Redefined. The guide explores the distinct characteristics that set this generation apart and offers strategic solutions for financial institutions to meet Gen Z’s unique needs.
It also discusses Gen Z’s prioritisation of financial wellness over personal wellness, indicating a significant market need for financial products and services that cater to financial health and literacy. Ultimately, digital transformation is a non-negotiable for engaging with this newest generation. However, it must be combined with personalised guidance and financial education.
The guide also details the specific challenges faced by Gen Z. For example, 46 per cent of Gen Z live paycheck-to-paycheck and nearly half are unable to pay off debt. Meanwhile, 31 per cent of them see a future with less reliance on traditional banking and a staggering 72 per cent are drawn to neobanks.
According to Finotta’s new guide, banks and credit unions are facing a significant challenge in adapting to the changing technological landscape, as younger generations, particularly Gen Z, become more influential in their banking preferences and behaviour. In fact, this generation is projected to have a purchasing power of $33trillion by 2030 and will make up 25 per cent of the workforce. It is essential for financial institutions to attract and retain these individuals.
Looking ahead, financial institutions must focus on Gen Z’s digital-first mentality and financial well-being to create an appealing banking environment. This can attract and establish long-term loyalty among this crucial generation while also positioning financial institutions for growth and long-term stability.
