According to a recent study, there is no single touchpoint to reach Gen Z, although a significant 86 per cent of the generation believe that cashback and loyalty rewards play an important role when making a purchase.
These findings, based on the ZBD ‘Gen Z Payments Study‘, a survey of over 2,000 18 to 27-year-olds in the US and UK, shed fresh light on what this generation wants from its interactions with payments, banking, and fintech providers.
ZBD says that Gen Z will likely be the largest and richest generation in human history. Having grown up as digital natives, there’s a tendency to assume they’re exclusively digital and only want to embrace the new.
Gen Z regularly uses both debit cards (62 per cent) and cash (57 per cent), although usage of digital-first payment methods such as apps (45 per cent) and digital wallets (48 per cent) have overtaken credit cards (41 per cent).
Payment apps (45 per cent) and digital wallets Google and Apple Pay (48 per cent) have overtaken the use of credit cards (41 per cent) among Gen Z.
This new study reveals that, far from automatically adopting emerging technologies, Gen Z values diversity and flexibility in their finances across established and emerging methods.
While Gen Z is embracing a digital-first attitude to payments, similarities with the generations before them still remain. In fact, they place the most trust in traditional banks (35 per cent), while neobanks (five per cent) are the least trusted. Amid seemingly contradictory trends, ZBD says that Gen Z’s interest in rewards and education is a common thread that binds together everything they do.
Rewarding Gen Z
Ben Cousen, chief strategy officer at ZBD, commented: “Our research shows that Gen Z is far from unreachable for the financial services industry; however, it’s true that there’s no one single touchpoint for them. What’s clear is that they expect their engagement with and loyalty to retailers, merchants, platforms and providers to be meaningfully rewarded, not just acknowledged.
“This paradigm shift is both being powered by and is set to radically alter the payments and fintech landscape, and is why we’ve labelled Gen Z ‘the reward(ed) generation’. As an industry, we need a diverse, multichannel proposition that – crucially – rewards Gen Z for the time and money they spend with us.”
Gen Z overwhelmingly believes financial education is important (99 per cent). They learn the most about financial management from family members (47 per cent), considerably more so than school, colleges and educational programmes (29 per cent).
While 80 per cent feel confident in their ability to manage their finances effectively, as much as 68 per cent often feel stressed about doing so. Seventy-six per cent use at least one type of financial app to help manage their money. ZBD also found that 67 per cent of Gen Z have at least one investment.
Overall, 64 per cent of Gen Z feel financially secure at this moment in time. However, many are on the borderline. When asked to rate their position on a scale from no financial security to total financial security, the figure was 6.2/10.
