Every generation has its own distinction, one such distinction for Gen Z is development in technology.
Finance is also a field greatly affected by technological development, bringing with it a lot of new and innovative systems and changes to traditional methods. One of the main changes it brought is digital banking is done online on your mobile and your computer.
This digital banking can be said to have grown mutually along with Generation Z, thus they are the most adaptable at it while at the same time, their personality is also molded by such developments.
In a world where we can have transactions with the tap of our fingers, it will rather be odd to go and stand in a queue in the bank for the same services. And Gen Z truly agrees with this. Not only in banking but in other fields like marketing, even in buying food and paying for it, self-service is a high priority for this age.
So, Who is Gen Z?
Engaging Gen Z – Crafting a New Era of Digital Banking
Gen Z are people who are born between 1996-2012. They are young and vibrant, and most importantly have vast knowledge about the growing technology. Unlike any other past generation who had to adapt to technology, this generation was born into the development. Thus, technology is one thing they grew up with, and it is natural to them.
So naturally, they make the most use of it and even in finance this proves to be true.
According to a survey done by Morgan Stanley, 50-80% of Gen Z who have mobile also use digital banking. Another blog by CNBC Select states that 99% of Gen Z use mobile banking to create accounts and manage their finances.
But this also does not mean they are against the traditional way of banking, it rather means that the convenience and the speed that digital banking has entices them.
Self-Service
Digital services entail one certain thing, that is self-service. Most of the mobile banking apps like Google Pay in India impose self-service. These apps are designed in such a way that an individual will be able to use them as easily as possible and with no hindrance. As a result, it has a help corner with AI-generated questions and answers.
Here an interesting observation was made, that is Gen Z’s unwillingness to call customer services and their will to do everything by themselves.
According to a blog written by WhoseOn, only 17% of Gen Z are willing to make a call to solve their problems. Rather than a whole lot amount of people, 71% try their best to solve their problems on their own. But not only Gen Z but rather 41% of people are switching banks and companies due to a lack of digital services.
Looking through the information, it is clear that the percentage of people who go for digital services will rise as Gen Z becomes older and takes control of more workforce and financial services. Furthermore, it is also right to say that future generations will become more and more digitalized.
Why does Gen Z Prefer Digital Channels?
It is more convenient
It is a clear fact when we say technology has made our lives much easier. And this is no different in finance. With digital banking, we can manage our accounts with our own phones anywhere we are. The transaction has become much easier and bank features and information are much more accessible now.
And Gen Z takes full advantage of this. To add to the point, Gen Z is customers who are not easy to please, with more than 45% saying they will change banks and providers if their expectations cannot be met. Digital banking further convenience such demand as it makes banking or changing banks much easier.
Tech-savvy
To others, digitalization may be a challenge but to Gen Z it is as natural as it gets. As they are generations who grew up using mobile phones, computers, and the internet daily, technology becomes their friend.
Thus, it is most convenient for them to use their phones and all the apps needed to do online banking.
Another interesting thing to note here is that even for financial advice, they turn to digital platforms. It is reported by insider intelligence surveys that Gen Z (68%) mostly looks for financial advice from influencers on YouTube.
Thus, to attract them, banks should market on different social media platforms such as TikTok, YouTube, Facebook, Instagram, etc.
Financial Knowledge
Gen Z is one of the generations that has plenty of financial knowledge. According to a study done by Go Banking Rates, 68% of Gen Z budget their finance, saves, and even invest more than their elder generation.
There is no longer a generation that knows finance only by the person who studies it, rather each person has the basic knowledge and can function properly without much help. More than 97% of their generation believe that financial knowledge is important and attend classes and seminars for it.
Another feature is they also are a group that is active in investing. A survey done by the CFA Institute finds that more than 56% of Gen Z are investing. Most of the investments are in cryptocurrency i.e. 55% and 45% are investing in stock.
When studied most of the Gen Z who aren’t investing are not doing so as they don’t have enough money not because they are unwilling to.
Now digital Banking plays a big role here again. As most investing mainly buying stocks and cryptocurrency is done online with the help of some websites and apps, it is easily accessible to all. Thus, making it possible for Gen Z to start investing so young.
Conclusion
To conclude, it is mainly comfort, convenience, and speed that makes Gen Z interested in self-service and digital banking. Another fact we can note is Gen Z is one generation that is easily keeping up with the rapid development of technologies, including fintech.
They are one distinct group of people different from any other generation and are leading with unique ways going forward.