As children of the Great Recession, Generation Z — the demographic cohort under age 25 — is defined by their careful approach to money management and eagerness to learn about finances.
“Zoomers,” as this generation is also called, have witnessed significant financial turbulence in their short lifetimes. As children, they watched their parents struggle through the 2007-2009 recession and its markedly prolonged recovery.
As members of Gen Z began entering college, the rising cost of higher education and accumulation of student loan debt stood at the forefront of national financial conversations. And just as the eldest members of Gen Z prepared for college graduation and entry into the workforce, the global pandemic threw the world into economic disarray.
This experience with instability prompted Gen Zers to become practical and frugal with their money. According to Credit Union Times, 91% of Gen Z members plan on owning a home, 69% prioritize saving for retirement and 68% are concerned about accumulating debt.
Zoomers are not only interested in building wealth, but they’re on track to becoming the best-educated generation yet, according to Pew Research. So, what must financial institutions do to attract this well-informed, tech-savvy generation?
A combination of flexible tech and personal banking relationships
When it comes to choosing a banking partner, members of Gen Z seek functional and flexible online and mobile banking capabilities. Having grown up in a digital world, they want a financial partner whose technology is functional and flexible on every device. According to Forbes, as of 2019, 80% of Zoomers who carry smartphones are using mobile banking apps. However, this is not to say Gen Z relies exclusively on technology to handle banking needs.
In fact, despite being the most digital generation in human history, Gen Z finds comfort and value in personal banking relationships. According to FinTech, 67% said they want to bank with institutions that offer nearby physical branches. Gen Z customers view technology as a complement to that banking relationship rather than its foundation.
Idealistic alignment
In addition to a personal relationship that offers customized banking, Gen Zers seek something else when selecting their financial partner: idealistic alignment. While financial institutions have historically remained politically neutral, Gen Z’s penchant for activism has prompted many organizations to join new conversations. Ensuring members of Gen Z that both their personal values and financial needs matter is a healthy way for banks and credit unions to welcome the next generation of account holders into their portfolios.
Financial advice to inform decisions
The economic turmoil this young cohort has witnessed early in life has made Gen Z acutely aware of the value of financial education. Its members seek personalized advice for budgeting, money management, investments and major financial decisions, such as mortgage lending. According to Credit Union Times, 64% of Gen Zers desire products and solutions tailored to their lifestyles and financial goals. If their financial institutions do not provide or satisfy this need for guidance, Gen Z will search for answers elsewhere — including social media.
In an age when social media is the vehicle for sharing news and information, many Zoomers are turning to trusted accounts and influencers on those platforms for financial advice. According to Tallo Data, nearly 45% of Gen Zers receive their financial tips from TikTok, Instagram and Twitter. More than one-third have turned to TikTok alone for financial tips, particularly around budgeting and long-term savings methods.
Whether it’s creating educational content for social channels or elevating brand awareness around personalized one-on-one financial services, financial institutions must learn to be flexible to reach the next generation of banking customers where they are, in a way that builds trust and sets them up for long-term financial success.
If you’re a member of Gen Z looking for a banking partner, working with a community bank like Paragon could be the best strategic move you can make for your financial future. Learn more at bankparagon.com.
Paragon Bank delivers innovative products and financial expertise, convenience, and a deep understanding of what both businesses and individuals need from a bank. In business or personal banking, lending options or wealth management, Paragon delivers cutting-edge tech and one of the most experienced, service-oriented teams of any community bank.
