Gen Z Banking & Money Preferences
The meteoric rise of digital payment options, transitions towards a cashless society and increases in mobile currency use has provided Gen Zs with more financial optionality compared to older generations. Here are the three key motivators shaping Gen Z banking and money management decisions:
Gen Z Is Attracted To Banks That Offer Technology, Access And Convenience
In 2019, according to insights from financial analysis firm Raddon Research, 67% of Gen Zers had some type of bank account. Similar to Millennials, Gen Xers and Baby Boomers, most Gen Zers hold accounts with major banking institutions. Although big banks don’t always align with many Gen Z values, younger consumers tend to lean toward big banks because of the technology optionality and location conveniences they offer. Raddon Research vice president of research Bill Handel said, “When you look at the way [big banks] advertise and promote themselves, it’s so much about technology. That’s the thing that differentiates them [for Gen Z].”
Gen Z Strives To Avoid Unnecessary Debt
Most Gen Zers have adverse feelings with regard to building debt, and they instead value a more accountable approach to spending money. Handel said, “When it comes to Gen Z, there’s a level of debt aversion, debt consciousness, that we didn’t see in the Millennials.” Younger consumers prefer debit cards to credit cards but seriously dislike cards that allow consumers to overdraft their balances. According to insights in the Generation Z: The Touchscreen Generation report by Raddon Research, Gen Z consumers are nearly three times more likely to opt for bank accounts that protect them from overdrafting.
Gen Z Is Wary Of Advertising But Trusts Influencers
Although Gen Zers spend a lot of time using social media apps such as SnapChat, Instagram and TikTok, they are skeptical of overt advertising. According to Raddon Research, only 29% of Gen Zers would take financial advice from a brand ad they saw on social media. However, Gen Z responds favorably to influencers, which are a growing advertising trend often tied to social media content. Many Gen Zers view content shared by influencers as relatable, informative and, in many cases, truthful.
Chase & FinTech App Greenlight Help Parents Teach Gen Z About Money Management With New Checking Account
Earlier this month, Chase announced the launch of Chase First Banking, a checking account designed specifically to help parents teach children and teens money management skills. Chase collaborated with fintech platform Greenlight to create the kid-focused checking service via the Chase Mobile app with a mission of helping parents teach their children financial literacy and develop an understanding of debt control. Head of digital for consumer & community banking at JPMorgan Chase Allison Beer said, “[With parents] juggling more responsibilities than ever before, we’ve made it easy for parents to manage kids’ allowances, keep track of chores and teach important financial skills from within the Chase Mobile app.”
The Chase First Banking account is available to existing Chase customers and their children ages six and older. The account gives parent and child users access to three features: earn, spend and save. Parents can manage their children’s allowance, set spending limits and track their children’s overall spending. Parents can also use the app to assign chores with specific allowance amounts tied to them. The new Chase First Banking account allows child users to have personal debit card numbers to use for in-store and online purchases.
Step Connects To Young Consumers With TikTok Influencer Partnership
Leveraging both the surge in TikTok users and Gen Z’s trust of social media influencers, Step – the no-fee digital bank for teenagers – recently announced its latest brand ambassador campaign. Partnering with mega TikTok influencer Charli D’Amelio, Step is positioning its brand in front of D’Amelio’s 90 million social media followers. Step is a Visa-powered free and secure platform that offers customers over the age of 13 checking and savings accounts, debit cards, credit cards and mobile wallet capabilities for easy online and in-person spending. Step also allows parents to link their accounts to their children’s accounts for easy allowance or money sharing options. D’Amelio’s content related to Step will promote the benefits of the platform and its referral codes program, which allows users to earn money for each friend they connect to Step.
As part of the new influencer campaign, Step announced a social media sweepstakes, within which a user could win $100,000 by creating a Step account, following @Stepmobile and liking one of D’Amelio’s related posts and tagging three or more other users. Step founder and CEO CJ MacDonald noted in an interview with Business Insider that the influencer partnership is the brand’s effort to achieve cost-effective but targeted customer acquisition. Step’s first collaborated post announcing Step Mobile’s sweepstakes via Charli’s TikTok received 2.3 million likes and 12,000 shares.
In addition to the influencer partnership, Step is also launching a brand ambassador program, for high school and middle school students, to raise awareness about the importance of financial literacy and money management. With these latest marketing efforts, Step aims to increase its brand awareness among younger consumers via social media channels where its target audiences are spending much of their time. MacDonald said, “[Teens] expect to manage their money in the same way as their social media, but banks have failed to keep up — largely overlooking this generation and their unique needs. Step was built to fill this gap, providing modern financial tools that enable teens to easily manage their money while helping to improve their financial literacy at an earlier age.”
Introducing The Digital Bank For Latin American Parents & Children
According to Crowd Fund Insider, in Latin American countries, consumers’ primary method for accessing the internet is via mobile devices. With 70% of the population of Latin American countries considered “unbanked” and the use of mobile internet rising, fintech platforms are leveraging an opportunity to serve the evolving needs of consumers in Mexico and South America.
Launched in July in Mexico, Mozper is the first digital bank platform designed for Latin American parents. Mozper partnered with Visa to offer a digital debit card and other mobile banking services for parents and their children by focusing on fostering positive money management and financial literacy skills. Mozper allows parents to easily track their children’s spending habits, quickly transfer allowance funds and interact with children to teach money management. Through the platform, children can use their Mozper account numbers to make in-store and online purchases. CEO of Mozper Uruguayans Gabriel Roizner, “Having had a financial education since I was a child, I understood that it doesn’t matter how much you have, but what you do with what you have. And I felt that a product like Mozper was needed, especially in Latin America.”
Connecting With Gen Z Consumers Represents Enormous Lifetime Consumer Potential For Financial Institutions
According to AdWeek, while brand recognition starts as early as age 2, establishing brand loyalty with consumers by age 18 is essential as they begin to create strong brand preferences. With many more critical life events ahead of them, Gen Zers represent a massive opportunity for financial institutions. From student loans to mortgages, banks that successfully connect with Gen Zers have an opportunity to build lasting relationships with a growing segment while reinforcing relationships with their parents.
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