FinTechTalk: Engaging Generation Z

On 9 April 2024, FintechTalk host Charles Orton-Jones was joined by Veronica Glab, Head of Partnerships & Investment Lead, Innovate Finance; and Michael Barskyi, Head of S-PRO Switzerland, S-PRO.

What characterizes GenZ
GenZ is the first digital native generation, which also grew up in a global world. They are more conscious savers financially and open to using digital tech. They also have a short attention span and are wary of legacy systems. Stats suggest that about 85 per cent of GenZ has already taken financial advice from social media to make a transaction. They are also self-sufficient and have a tendency to trust fintech. Their trust for neobanks derives from transparency being a top priority for them. Their embeddedness in the digital world makes it hard to recruit them for IT jobs that include working with legacy systems in banks, who, therefore, have to dangle some extra incentives to employ them. 

How the scene is changing
Incumbent banks have an edge in certain areas, though. They have more resources to experiment with and finance the deployment of new technologies such as AI. Loyalty as an employee is not a thing for them as they are after maximising their incomes to save up for a good pension or buy a house and that is also where their liking for fintech stems from. While big banks have a huge reservoir of data, they often don’t know how to leverage it, fintechs use customer data readily to personalise the customer experience. What banks can do to appeal to GenZ is offer better in-app experiences. They can also follow in Monzo’s and Revolut’s footsteps as they provide in-app educational material with their investment products. 

GenZ, nevertheless, also shows some signs of vulnerability, which raised the question of regulating “finfluencers” in several countries mandating the tagging of sponsored content as an ad. Among platforms, it’s much easier to find sound financial advice on Reddit than Tik-Tok, as the latter is mostly about building brands and not disseminating useful information. Shares.io is another platform where good financial information is shared among users – a whatsapp meets Revolut kind of forum that removes potential investors from the reach of finfluencers. 

Settlement times are a critical area for GenZ and they typically won’t settle for anything worse than real time. In traditional banking systems money  transfers and investment can get stuck with the corresponding back, while with blockchain-based technologies, you can always tell where the money is, even if its invisible on the user interface. Fintechs are also more likely to demonstrate the ESG metrics that matter a lot to GenZ than incumbent banks.