When it comes to technology, the Gen Z cohort is stereotypically seen as digital natives - young people who have grown up immersed in the online world and are innately comfortable with all things tech. And our data backs this up to some degree; Gen Z and Millennials use a wider variety of sources, both old and new, to learn about financial matters compared to older generations. This includes heavy usage of social media (inevitably), online banking, and other digital channels.
However, the findings also reveal what looks like a surprising twist - despite their tech-savvy reputation, a significant portion of Gen Z actually struggle to use technology to manage their money. In fact, 1 in 5 Gen Zers report difficulties using technology for financial tasks. This is a slightly higher rate than even Baby Boomers, a generation often stereotyped as less tech-literate.
So what's going on here? It seems that while Gen Z may be comfortable with technology in many aspects of their lives, when it comes to the specific task of personal finance management, they encounter more challenges. The language and maths involved in things like budgeting, investing, and understanding financial products can pose barriers, even for this digital-native generation.
This is an important insight, as it debunks the assumption that young people today are automatically financial technology wizards. Just because Gen Z and Millennials grew up with smartphones and social media doesn't mean they automatically have the skills to effectively leverage technology to improve their financial wellbeing.
In contrast, the research shows that older generations like Baby Boomers, who are sometimes stereotyped as technophobic, are actually more comfortable using certain digital financial tools. Two-fifths of Boomers reported using websites (not exactly that new to be fair) to learn about finance, suggesting a higher level of tech adoption in this area compared to their younger counterparts.
Perhaps it shouldn’t be that surprising though, just a mental short-cut that traps us into stereotyping… just because someone is great at using their camera or navigating multiple social feeds it doesn’t mean that they can automatically use an app for buying commodities.
The takeaway is that financial services brands cannot rely on Gen Z's reputation for tech-savviness when it comes to helping them manage their money. Simple, user-friendly design and clear, jargon-free communication will be key to empowering this generation to truly leverage technology to improve their financial wellbeing. Bridging this gap between Gen Z's overall tech comfort and their struggles with financial technology could be the key to future customer acquisition…
The above blog is based on our Financial Services Generations report – if you’d like a copy, click here: LINK
Alex Johnston, July 25