The financial world will have to undergo significant reshaping to meet the demands of the next generation, Gen Z, with very different purchasing habits from previous generations.
Gen Z grew up during the 2008 recession and the social media era. It influenced their perspective on credit as a means to enable their lifestyle while spending wisely.
As they will make up 27% of the workforce by 2025, financial service providers need to cater to their unique needs and desires.
This article analyzes what Gen Z expects from financial services and their pursuit of happiness.
Gen Z: redefining the financial services landscape
The new generation is shaking up the financial services industry with bold expectations. They want financial services to cater to their unique needs and preferences. Let’s see how they redefine the financial services sector with their mobile-first and straightforward approach.
As a generation that has grown up in a digital age, Gen Z has high expectations regarding financial services. As a result, they demand bespoke financial services that cater to their unique needs and financial goals.
The following numbers show that Gen Z wants financial services that cater to their individual needs and preferences:
- 77% of Gen Z require businesses to customize interactions with them through their apps.
- 76% of this population wants companies to send them personalized digital communications based on their preferences.
- 16% of this new generation members can change banks if they find other banks are offering more personalized services and care for their needs.
- 15% of Gen Z respondents said "a better customer experience" would lead them to swap providers.
Transparency and ethical practices
For Gen Z, a brand’s reputation is key when purchasing. According to a research survey, 62% of Gen Z respondents preferred buying from sustainable, ethical brands.
This means that financial interactions are no longer seen as just transactions but as a way to make a difference in the world.
The trends of anti-status money and community commerce are closely related to transparency and ethical practices:
Refers to consuming products or services deliberately chosen to avoid displaying one's wealth or social status.
This concept is often associated with specific segments of society who reject mainstream consumerism and instead seek out less well-known or unconventional products and experiences.
This trend focuses on creating a mutually beneficial relationship between a business and its community.
A company prioritizes local sourcing, environmental sustainability, and ethical practices in this trend.
These trends are driven by shoppers with interest in supporting businesses that align with their values and want to know where their money is going.
Financial services providers who want to thrive in this environment need to prioritize transparency and ethical practices. By doing so, they can build trust and loyalty with their Gen Z customers and become a meaningful part of their communities.
Transparency is essential in building trust with Gen Z consumers. Financial services companies can demonstrate their commitment to ethical behavior and sustainability by being open and honest about their practices.
Digital and mobile-first approach
The digital and mobile-first approach has become increasingly popular among Gen Z. With the widespread use of smartphones, this approach provides convenience and flexibility, allowing users to use financial services from the comfort of their mobile devices.
These statistics highlight the importance of digital and mobile-first strategies in the financial industry to meet the needs and preferences of this generation:
- 63% of Gen Z members prefer online or mobile banking, as per the National Association of Student Financial Aid Administrators (NASFAA).
- Only 37% prefer to visit a physical bank branch.
Additionally, this generation is tech-savvy, growing up using Facebook, YouTube, and iPhones.As a result, they are five times more likely to seek financial advice on social media, making it crucial for financial institutions to have a social media presence and offer financial advice through these platforms.
When it comes to purchasing products or services, Gen Z consumers are looking for simplicity. They prefer solutions that are
- Easy to understand,
- Handy with upfront information, and
- Available in a shorter-term commitment.
And, it is exactly what financial solutions providers like cashew focus on - simplicity, flexibility, and no long-term commitments. With an aim to provide simplified solutions like buy now, pay later, cashew offers a mobile-friendly user experience.
Therefore, financial companies that have complicated and lengthy application processes are outdated and no longer resonate with this generation.
Value for money
Gen z has been labeled savvy shoppers as they, more than most generations before them, consider value for money when purchasing.
Only 94% of Gen Z members would switch their banking provider if an alternative offered benefits like
- Better rates and fees,
- Better products and services,
- Better locations and hours, and
- Came recommended by a friend.
This statistic highlights the importance of offering value for money to attract and retain Gen Z customers.
Gen Z is more willing to switch financial service providers than any generation before, provided they are presented with the right offering and experience. Financial institutions need to know what this generation wants and needs from their financial experience.
Competitive pricing, high-quality products and services, anytime accessibility, and social recommendations can all be effective ways to attract and retain Gen Z customers.
Additionally, Gen Z is seeking transparency and honesty from their banking providers. They want to know precisely what they're getting, what they're paying for, and where their money is being used.
Financial institutions that are upfront and transparent about their services and fees are more likely to earn the trust and loyalty of Gen Z customers.
Amidst the trend of community commerce and anti-status money, Gen Z consumers look for value for money differently. They seek products and services that align with their interests and values but provide good value and a unique experience.
In these ways, financial services providers offering value for money are more likely to attract and retain Gen Z customers looking for authenticity and meaning in their shopping experiences.
Financial wellness through education
Education and guidance are crucial aspects of financial management, particularly for Gen Z, who are just starting to navigate their finances. Recent studies show that:
- 43% of Gen Z members want to learn how to save money.
- 38% want to learn how to manage their personal expenses.
- 36% want a class that teaches them how to file their taxes.
These statistics highlight the importance of providing educational resources and guidance to this generation to help them achieve financial wellness.
In addition to educational resources, Gen Z also values 24/7 service, with 46% citing it as something they value highly. Financial institutions must be available to provide support and guidance around the clock, whether through human customer service representatives or efficient chatbots.
Despite spending more time behind their screens, Gen Z still trusts humans over robots. For example, one survey found that 23% of Gen Z respondents would prefer to buy an insurance product from a human rather than a computer.
This indicates that while technology is important in providing efficient and convenient services, a human touch is still necessary for building trust and confidence in financial institutions.
Therefore, financial services providers must maintain a human presence and offer timeless, informative, personalized support and guidance.
Providing resources and educational classes on budgeting, saving, and tax filing, as well as being available to answer questions and provide support, can go a long way in building trust and loyalty among Gen Z customers.
The Key Takeaway
Picture this - a group of tech-savvy and socially conscious individuals, born between 1995 and 2012, are storming the financial world with high expectations! But, of course, we're talking about Gen Z, the generation transforming the traditional financial landscape and demanding more from financial institutions.
Gone are the days of one-size-fits-all financial services - Gen Z wants their money matters to be personalized, transparent, and accessible through digital channels.
They expect financial institutions to keep up with the times and embrace a mobile-first approach. But that's not all. They also value ethical practices, community commerce, and getting value for their hard-earned money.
Financial institutions must prioritize transparency, ethical practices, and a tech-centric approach to win Gen Z customers' hearts.
These values will earn not only their trust but also their loyalty. After all, as Gen Z enters the workforce and starts making more, they'll seek financial service providers who understand their needs and expectations.
How does cashew simplify financial services for Gen Z?
You asked for personalization, and cashew offered a highly customized financial solution like buy now, pay later to provide flexibility in payment.
You asked for a digital-first solution, and our interactive mobile app won’t stop you from buying anytime from anywhere.
We have a presence in 500+ stores across UAE & KSA, allowing you to buy from your favorite brands and enjoy your shopping hassle-free.