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The spending and saving habits of Generation Z and their impact on financial services

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Currently, the youngest generation of adults (consisting of people between the ages of 18 and 23), Generation Z’s influence is growing, and not just on social media. However, in recent years, the Z generation has also encountered great difficulties.

Not only has this generation had to deal with education or launching into the world of work during the pandemic, but they are now facing a level of financial uncertainty not seen in decades with the current recession and crisis in the cost of living. Moreover, because this generation was born into a digital world, they have a new perspective on using technology in everyday life and are likely to be more receptive to new ways of doing things – including banking, saving and spending.

Our recent research explored consumer attitudes toward banking and financial services and threw up some interesting insights into how Generation Z spends and saves compared to previous generations, and what they expect from their banks. Here are three main findings:

1. The best fund managers

In contrast to what millennials have regularly experienced in media labeled as financially irresponsible, the new wave seems to be turning a corner. Plus the moitié of the members of the generation Z utilisent déjà des comptes d’épargne alors que beaucoup d’entre eux ne sont même pas encore sur le marché du travail, tandis que 19% seulement capitalisent sur leur autorisation decouvert, contre 32% rate.

They are also the largest users of services that aggregate transactions into a savings pot and when asked which services they would most like to find from their banks, 14% said integrated budgeting was important – far higher than any other group and perhaps indicative of a generation growing up in difficult times.

2. Fight for your (client’s) rights

Compared to all other age groups, Gen Z showed the strongest tendency to switch bank accounts if their service provider did not offer them the services they wanted and expected.

More than a third of them have changed their bank accounts in the past twelve months, while the average for the age groups is only one in five. There’s no denying that customer service is better for Gen Z – 30% cited getting better customer service as a motivation to switch or consider switching providers.

Perhaps this is to be expected of a digital-born generation accustomed to the seamless, customer-centric and on-demand user experiences offered by services like Uber, Netflix and Amazon – so why not expect the same level of service from banks?

3. Say yes to the investment

Also according to this study, Generation Z is the age group that shows the greatest tendency to subscribe to investment products and, in particular, to invest in cryptocurrencies. When asked if they have ever considered investing in stocks or cryptocurrency, more than half of Gen Zers answered in the affirmative, compared to an average of 31% across all age groups.

While 27% of Gen Zers said they had specifically considered investing in cryptocurrency, only 19% of millennials were interested and only 14% of people had explored cryptocurrency across all other age groups. Far more than any other generation, Generation Z is interested in new ways to invest and the future of money and banking.

How do banks learn from Generation Z?

As Generation Z shapes and participates more broadly in the world’s future, its influence in the banking world will not go unnoticed. Combine this study with the fact that banks are increasingly prioritizing more diversified, customer-centric products and services, and that nearly a third of them are looking to enable access to cryptocurrencies, it is not hard to see how Generation Z sets the agenda.

Banks should not rest on their laurels, and it will be interesting to see where this generation prioritizes their investments, as their capital and influence continues to grow as they age. One thing is for sure: This generation will not accept the status quo when the going gets tough.

Tribune by Rivo Uibo, Co-Founder and Commercial Director of Tuum

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