Research on Gen Z Reveals Financial Savvy, Banking Opinions
LOMBARD, Ill., November 6, 2017 – New research from Raddon™, a Fiserv company and provider of innovative research, insightful analysis and strategic guidance to financial institutions, reveals several counterintuitive findings on the financial behaviors and preferences of Generation Z.
Generation Z: The Kids Are All Right, based on a survey of 2,500 high school students ages 16 to 18, 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.
The research finds that 56 percent of Gen Z respondents believe programs or seminars from financial institutions are very or extremely important sources of personal finance information. Boding well for their financial futures, 35 percent of Gen Z have attended a financial education program or seminar, compared to only 12 percent of Millennials, 11 percent of Gen X, and 16 percent of both Baby Boomers and Traditionalists.
“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
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.
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 finds 44 percent of Gen Z anticipate supplementing traditional banking services with solutions from technology companies, compared to only 28 percent of Millennials and 23 percent of Gen X.
The Three Distinct Segments of Gen Z
The majority of Gen Z are not financial newbies, as 67 percent already have an account at a financial institution, either on their own or as a joint account with their parents. Another 4 percent have had an account in the past.
Based on their attitudes towards technology, delivery channels, alternative providers and traditional financial institutions, three distinct segments of Gen Z emerged:
- Conventionals: More than one-third of this generation (34 percent) express a preference for banking much like their grandparents did, face-to-face at a bank or credit union. They trust financial institutions and are distrustful of technology companies entering the banking space to provide financial services.
- Digitals: Another 37 percent of Gen Z says they prefer to bank through digital or electronic channels, relying on services such as mobile banking provided by a bank or credit union. While they believe that technology companies will impact financial services, they believe they will still have to rely on traditional providers in the future.
- Pioneers: Twenty-eight percent of Gen Z stands on the bleeding edge of technology. They think all financial institutions are the same and want to bank in a way that is most convenient for them. They believe their future financial services needs will be met by an array of providers.
Regardless of segment, communication is key to Gen Z. Winning their business will require services and strategies that speak to their unique experiences and preferences.
An Executive Summary of the research is available at https://www.raddon.com/sites/default/files/genz-executive-summary.pdf and the full report can be purchased at raddon.com. Results of the study will be presented at the Raddon Research Conference taking place November 6-8 in Chicago.
Raddon, a Fiserv company, has been providing financial institutions with research-based solutions since 1983. Raddon works exclusively with financial institutions and has a unique understanding of the industry, resulting in the ability to apply practical know-how to the challenges and opportunities financial institutions face. Raddon combines best practices in research and analysis with consulting and technology solutions to help institutions achieve sustainable growth and improve financial performance.
Fiserv, Inc. (NASDAQ:FISV) enables clients worldwide to create and deliver financial services experiences that are in step with the way people live and work today. For more than 30 years, Fiserv has been a trusted leader in financial services technology, helping clients achieve best-in-class results by driving quality and innovation in payments, processing services, risk and compliance, customer and channel management, and insights and optimization. Fiserv is a member of the FORTUNE® 500 and has been named among the FORTUNE Magazine World's Most Admired Companies® for four consecutive years, ranking first in its category for innovation in 2016 and 2017. For more information, visit fiserv.com.