LOMBARD, Ill.– When it comes to the financial behaviors and preferences of Generation Z, new research has uncovered several counterintuitive findings.
That new research from Raddon, called Generation Z: The Kids Are All Right, is based on a survey of more than 2,500 high school students ages 16 to 18. It shows members of “Gen Z” are eager for financial education and have done more to further their knowledge of financial matters than preceding generations. Gen Z also shows a notable streak of traditionalism in their banking preferences, Fiserv said.
“The research finds that 56% of Gen Z respondents believe programs or seminars from financial institutions are very or extremely important sources of personal finance information,” Raddon said.
Boding well for their financial futures, 35% of Gen Z have attended a financial education program or seminar, compared to only 12% of Millennials, 11% of Gen X, and 16% of both Baby Boomers and Traditionalists, according to Raddon.
“Gen Z will soon step into the spotlight as they begin to enter adulthood and take on the financial responsibility it brings,” said Bill Handel, vice president of research, Raddon. “By taking the time to better understand this generation’s priorities and preferences for moving and managing money, financial service providers have an opportunity to establish relationships that will last a lifetime.”
Digital Natives Anticipate Tech Supplementing Banking
Raddon noted the first generation of true digital natives, Gen Z was born beginning in the year 2000. “They have been raised in a world of constant connectivity via mobile devices and social media, are well-versed in digital technology and accustomed to a continual flow of information, all factors that will influence how and where they bank,” the company said.
Raddon posited that perhaps as a result of their exposure to all things digital, Gen Z is more likely to say they envision a future where technology companies supplement banks or credit unions by providing additional financial services.
The study found that 44% of Gen Z anticipate supplementing traditional banking services with solutions from technology companies, compared to 37% of Millennials, 26% of Gen X, 19% of Baby Boomers, and 10% of Traditionalists.
The Three Distinct Segments of Gen Z
The majority of Gen Z are not financial newbies, as 67% of survey respondents already have an account at a financial institution, either on their own or jointly with their parents. Another 4% have had an account in the past, Raddon reported.
According to Raddon, based on their attitudes toward technology, delivery channels, alternative providers and traditional financial institutions, three distinct segments of Gen Z emerge from the research:
- Conventionals. More than one-third of this generation (34%) express a preference for banking much like their grandparents, interacting face-to-face at a bank or credit union. They are distrustful of technology companies entering the banking space to provide financial services.
- Digitals. Another 37% of Gen Z prefer to bank through digital or electronic channels, relying on services such as mobile banking provided by a bank or credit union. While they expect technology companies will impact financial services, they also believe they will still have to rely on traditional providers in the future.
- Pioneers. Nearly one-third (28%) of Gen Z stands on the bleeding edge of technology. They think all financial institutions are the same, want to bank in a way that is most convenient for them, and believe their future financial services needs will be met by an array of providers.
“Regardless of segment, communication is key to Gen Z,” Raddon said. “Winning their business will require services and strategies that speak to their unique experiences and preferences.”
An executive summary of the research as well as the full report are available at raddon.com/GenZ.