Key Takeaways:
- Financial providers can create opportunities to help Generation Z finances
- Gen Z consumers actively seek financial guidance and advice
- Advances in technology enable hyper-personalized digital experiences
- An engagement strategy focused on personalized financial empowerment works with Gen Z
The economic uncertainty of the past few years has prompted a lot of questions from younger consumers just starting their financial journeys. What’s impressive about Gen Z consumers, also known as Zoomers, is they haven’t been shy about looking for help. The quest to guide Generation Z finances has inspired countless apps and financial influencers, also known as finfluencers, many of which have grown in popularity — even if some of the recommendations those finfluencers offer are suspect.
In addition to looking for help, data from TransUnion® shows Zoomers are also more active credit users than Millennials were at the same stage of life.
For a financial service provider, these trends combine to create a significant opportunity to assist Gen Z customers as they set out on their financial paths. Providing personalized digital experiences can empower them to build stronger financial foundations — while helping banks or FinTechs to develop long-lasting relationships with them.
Gen Z financial trends
Starting their finances in the wake of a global pandemic while facing significant inflation and navigating unprecedented market turmoil, Zoomers are anxious for a brighter future. As a result, they’re particularly receptive to financial guidance and educational programs. As digital natives, many of them turn to online resources for this support.
Gen Z’s demand for money advice is behind the rise of online finfluencers: 57% of 18 to 29-year-olds said they seek advice about investing online, and of those, 62% reported feeling empowered by that advice.
Unfortunately, the truth of the matter is finfluencers often provide unclear, misleading, or in some cases, unfounded recommendations. To reach their financial goals, Zoomers need proven, trustworthy resources providing reliable, relevant guidance.
Personalization is key to a successful engagement strategy
For a generation that’s only known customized digital experiences — from bedtime storybooks in which they’re the main character to tailored feeds of their social media accounts — broad financial advice is not persuasive.
Zoomers’ preferences for personalized experiences can be seen across a variety of modalities. They curate their wardrobes with subscription style boxes. They’re drawn to gaming platforms that enable character customization. They rely on buy now, pay later and other point-of-sale options to pay on their own terms.
Financial institutions can take a page from Zoomers’ favorite brands by embedding hyper-personalized financial wellness tools and features into the digital banking experiences Gen Z consumers already know.
Canned financial advice has no place in a modern engagement strategy. To attract Gen Z consumers and keep them coming back, financial providers need to provide similar, personalized customer experiences.
Personalization encourages financial empowerment
The democratization of data analytics and adoption of API integrations now enable financial institutions and FinTech companies of all sizes to deliver intuitive, hyper-personalized digital experiences. Three examples of how such personalization can enhance the financial knowledge of consumers and influence Gen Z financial habits include:
- Credit score simulators: Like loan repayment calculators, these interactive tools can improve consumers’ understandings of how their decisions today can influence financial opportunities tomorrow. With Gen Z and Millennials comprising 53% of active credit monitoring consumers, incorporating a credit score simulator into a digital dashboard can encourage these consumers to regularly test scenarios to illustrate how they might help — or hurt — their credit scores.
- Identity risk scores: Just as a credit score provides a numerical value to an individual’s creditworthiness, an identity risk score analyzes a person’s unique data breach histories, determines what identity crimes they’re at risk for, and assigns a numerical value. This hyper-personalized insight, when coupled with a customized action plan to reduce that risk, helps educate consumers on how they can better protect their identities, credit and payment information. With 74% of Gen Z consumers reporting they’re concerned about having personal information or data stolen, providing such personalized insights as part of a digital experience can be a valued and powerful tool.
- Personal financial management: Monitoring financial transactions and categorizing spending are helpful tactics, but turning that personal data into tailored financial advice takes it to the next level. When digital channels provide financial recommendations customized to their individual situations, Zoomers can be more open to advice regarding spending, saving and investing.
Empowering Generation Z finances with personalized services
As Gen Z consumers move along their financial journeys, they’ll likely continue to seek advice and guidance. By enhancing their products and services with hyper-personalized digital experiences and interactive tools, financial service providers have the opportunity to deliver the help Zoomers want — while building trust and loyalty along the way.
The result is a brighter financial future for Gen Z consumers and a more brand-loyal base for each responsive financial provider.
Looking for ways to incorporate greater personalization into your digital experience? TransUnion TruEmpowerTM solution suite enables you to deliver hyper-personalized credit and identity insights, along with educational tools to empower your customers for the long haul. Learn more.
