Here’s a poke in the eye for financial marketers from a member of Generation Z:
“My numero uno message to brands that try too hard with the things that a 40-year-old thinks we would like is: If you think ‘Oh, that’s perfect for Gen Z’ — that means it’s probably a Millennial idea and a straight path to failure. We are different.”
This quote, from a report by CNBC, may be snarky, but it’s also a wakeup call for financial marketers.
In many ways banks and credit unions got a late start on Millennials, and many are still speaking of that generation as if it were a fresh phenomenon. Yet Generation Z has already started to enter the workforce. According to GlobalWebIndex, in an international study, 33% of Gen Z is already working, full-time, part-time, or freelance. Gen Z has already begun spending money — and 77% of 18-21 year olds make P2P payments, according to Zelle. Gen Z is forming impressions of traditional financial institutions — with or without the institutions’ input.
Overall, Gen Z is turning out to be an interesting mix. While not all researchers use the same boundaries, one common definition of Gen Z is people born between 1995 and 2015. Much of what formed the experiences of older generations, even Millennials, no longer exists or was supplanted by technology. The use of “iGen” to describe Gen Z is falling away, but it fits a group of people for whom the internet, instant wireless communication via multiple channels, and next-day-delivery ecommerce comprise everyday life. Yet in some ways they seem closer to their parents than Millennials did.
Lorna Gill, Marketing Manager at Adthena, says in a white paper that: “Generation Z is highly adept at recognizing inauthentic brand experiences, and to resonate, advertisers need to become part of the conversation. They will need to move away from a world in which brands market to consumers, and towards one where brands market with consumers.”
Here are 15 Gen Z trends important to financial marketers, grouped under four broad themes.
Gen Z’s Mobile-Device Connected Life
1. “Time to groom my phone.” Different studies of Gen Z behavior come up with various averages of how much time they spend on their mobile devices. The Center for Generational Kinetics (CGK) reports that 55% of Gen Z spends at least five hours a day on their smart phones, and one third of the women among that group spends ten hours or more on their phones. Another study says the average is seven hours.
As you might expect, that concentration begets an interesting phenomenon. Some Gen Zers also spend an enormous amount of time maintaining their phones and other smart devices, from making sure they have the latest operating system iterations to verifying that connections among their devices keep working. Cognizant and CGK, in a joint study, estimate that Gen Z spends an average of 159 hours a year on this task — over six days. 15% of the survey sample spends over seven hours a week on this. This suggests that Gen Z will expect providers like bank and credit unions to keep their apps up to the latest capabilities.
2. Voice may be a passing fancy. Another twist on mobile tech is how Gen Z will prefer to interface with devices. The Cognizant/CGK study asked consumers from Gen Z, Millennials, and Gen X how they expected to prefer to use their devices in the near future. Typing was favored by a handful of people of each generation, but much more surprising was that Gen Z was the least interested in voice interaction — 33% wanted it, versus 49% among Millennials and 50% among Gen X. 56% of Gen Z prefers touch interaction — swiping and tapping, silent and simple. (40% of Millennials preferred touch, and 34% of Gen Xers.) This suggests significant changes in apps, and perhaps less investment in voice interface.
3. Do you speak “meme”? Evolving communication among Gen Zers presents a potential “language barrier” for older generations. The Adthena white paper suggests that many Gen Zers are developing a “meme vocabulary.” This means communicating by images, going even beyond emojis.
“The way that Generation Z interacts with digital media is breaking new ground,” the report says. “Conversations, or interactions, are much more visual, to the extent that it might be considered part of a visual vocabulary. Would they expect the same from their advertising experiences?”
4. Gen Z could be called the “omnichannel generation.” In a backgrounder CUNA Mutual Group explains that “Digital natives see all your channels as one integrated experience. Because of this omni-digital lens, they expect to be able to conduct transactions completely digitally, and to seamlessly move between channels without having to re-enter data or restart a process.” The guide adds that Gen Z increasingly manages every aspect of their lives on their devices, all the time, using apps, voice assistants, wearables, and devices connected to the internet of things.
5. Gen Z wants technology that “just works.” Not only that, but they will pay heavily to see that it does, according to the Cognizant/CGK study. And if the tech doesn’t work, they want it fixed quickly. Of course, all generations want technology that works, the study notes. “What makes Gen Z unique is that they tend to look to others to fix things, and they are open to paying for such help.”
The study found that Gen Zers say they would pay between $50 and $100 monthly for a service that would set up, monitor, and repair their gadgets. This suggests that someday these individuals may be willing to pay for financial management and planning in some format, so that their financial life “just works.”
6. Gen Z is a stressed generation. The older tier of this generation is already working, or on the cusp, and for them finances are a major concern, according to “Marketing to Gen Z,” a report from Mintel Group. More than one in five of these older Gen Zers say money is the greatest stress they face, in a part of the survey data not reflected in the chart below. Nearly half of this subgroup worry about their futures — careers and more — in general. “Financial institutions that offer approachable and easy to use digital tools to manage money and save for the future could attract young consumers with the loyalty to stay when their paychecks start increasing,” Mintel says. Two efforts Mintel mentions favorably are Acorns, the investment app, and Navy Federal Credit Union’s EasyStart Investor.
Social Media, Where Gen Z’s Real Life Meets Digital Life
7. Social media is part of Gen Z’s social life.Commentators often distinguish between Gen Z’s “digital life” and “real life,” but given the way they live the border grows blurry. One example: Adthena found that 54% of Generation Z has researched a purchase on social media, going beyond Googling. “Generation Z is comfortable interacting with brands conversationally,” Adthena observes, “and this should not be underestimated. These organic interactions have molded the expectations of a generation of young consumers.” Adthena’s advice: “Advertisers will need to become part of the conversation; they will need to understand the wider discussions that are happening in digital media, and evolve their messaging to resonate with the next generation.”
8. Social media influencers’ role in buying decisions will grow with Gen Z. Multiple analyses of Gen Z behavior indicate paid influencers, a tool typically only used by larger financial institutions with deep pockets, have a strong pull for them — Adthena found that 65% of Gen Z follow social media influencers. While Mintel indicates that over half of adult internet users follow people they don’t know in “real life,” Gen Z is especially driven by celebrities and other influencers.
“Brands can no longer deny the impact [influencers] can make, especially among the highly engaged Gen Z market, by partnering with influential social media personalities,” says Mintel. “As more traditional forms of advertising find it more challenging to catch the attention of teens and young adults, strategic social media partnerships could become the best way to reach young consumers.”
9. Facebook continues to rule Gen Z social, but watch newcomers. Several reports point out that in spite of industry talk about the flagging of Facebook, it continues to lead channels both in membership and usage by Gen Z, followed by YouTube and Instagram. As the chart below from GlobalWebIndex indicates, if a financial marketer is only monitoring Twitter and LinkedIn, they are blind to a lot of what Gen Z is looking at on social.
If you are a Millennial or older, chances are you have never heard of Tik Tok. It is a social media platform founded in China that features very short videos posted by members — called “musers.” (Tik Tok should not be confused with TicToc, Bloomberg’s streaming news-oriented videos.)
Tik Tok is new on the U.S. scene, but already beginning to explore selling advertising. And Mintel’s report points to a teen muser who makes $40,000 a month as an influencer, selling ads and brand promotion.
The Gen Zer quoted at the outset of this article would not be surprised to find that Baby Boomers and Gen Xers, maybe even a few Millennials, would find Tik Tok postings a bit weird. But financial marketers have to watch where Gen Z goes.
10. Gen Z will block your web ads — but not your social content. In its international study of Gen Zers 16-21, GlobalWebIndex found that just over half use ad blockers online. They told the firm that they find ads too intrusive, too numerous, and too annoying and irrelevant. They also begrudge how much screen space ads take up, so they block them. Adthena found that 26% of Gen Z uses mobile ad blockers.
However, “Gen Z is happy to have content from their favorite brands appear on their newsfeed,” states GlobalWebIndex. “Four in ten are following brands they like on social media, with one in three following the brands they are thinking of buying from.”
One key exception: The Cognizant/CGK study found that 34% of Gen Z does see online ads as helpful if they are tailored to their needs. And 38% think ads selected based on their browsing history or entertainment preferences are more effective than any ad shown randomly.
How does a financial brand become a favorite brand? Mintel’s report has the germ of an idea: “Brands that can show they understand the importance of the hard work that Gen Z adults put into their early careers can appeal to young adults with messaging and opportunities that validate and reward them.”
Gen Z Wants Content — But Not What You Like
11. With Gen Z, “content marketing” means video. Most banks and credit unions that engage in content marketing have been working with the written online word — blogs, microsite, maybe even ebooks. Studies indicate that for Gen Z video ranks more importantly for reaching them.
“More Gen Zs have watched a video made by a brand (29%) than liked or followed a brand on a social network (26%) or visited a brand’s social network page (23%),” according to GlobalWebIndex. The high ranking of YouTube in the earlier chart supports this argument, and it will be interesting to see if financial brand videos take off on social platforms like Tik Tok.
Mintel’s report indicates that some traditional book publishers are experimenting with books’ sizes and paging to approximate a “mobile feel” in a print vehicle. The jury’s still out on that, but in the meantime start learning more about video, quickly. And the same report notes that some universities have been retooling courses to put more emphasis on videos.
12. Brands are no longer the fount of all wisdom in their fields. One of the linchpins of content marketing in financial services is that banks and credit unions have expertise to share with confused consumers. That’s not the way that a substantial portion of Gen Z thinks, however.
The Cognizant/CGK study found that Gen Z believes that content and recommendations from actual customers of a business or from social media influencers are more trustworthy. “35% of Gen Z thinks user-generated content in the near future will have more credibility than content that comes from a company or independent source,” the study says. “Advertisers, content and service providers will need to create or tap into platforms for social sharing and user-generated content, and put an emphasis on influencer marketing to reach this growing audience.” This ties in with Adthena’s finding that 86% of Gen Z seeks out positive online reviews when making an online purchase.
13. Interactivity may be part of future content — if you want engagement. Gen Z is a generation that’s grown used not only to media immersion, but to interactivity and “content control.”
In one sense, Gen Z is shaping up as the all-time champion group of couch potatoes. Mintel’s report puts it bluntly: “Gen Z teens are avid indoorspeople.” REI, the outdoor equipment maker, has actually launched a program to get Gen Z off the nation’s couches, as Mintel puts it, “into the Instagram-worthy outdoors.” Meanwhile, in its international study, GlobalWebIndex found that one out of three Gen Zers have watched an esports tournament — more than younger Millennials. Esports is basically watching people playing video games in expert-level competitions. One of the biggest “arenas” — called Twitch — is owned by Amazon.
Cognizant suggests considering branded games as a promotional tool, and for large players that can afford that, this could be fruitful. Ally Bank has already had success with a mobile game and has been exploring a financially themed esport/game concept.
14. Email will likely get you nowhere with Gen Z. Banks and credit unions send out a ton of promotional emails and work harder and harder to target them to people likely to need what they are flogging. For Gen Z, email content may not even put you on the target, though.
Says Mintel: “Gen Z adults are sending fewer emails and text messages than older consumers. The primary form of digital communication for this generation does appear to be in-app messaging. Facebook’s and Instagram’s messaging functions are likely to evolve to mirror the message-focused WhatsApp.”
Gen Z Beyond Electronic Devices
15. After all this, device-bound Gen Z still likes human connections. This generation is not just about social media and apps. In some ways, they are more about relationships with family and friends than other generations, but with a difference.
Something that comes through in study after study is a closeness with parents that is somewhat unexpected. 76% of respondents to the GlobalWebIndex study said “family is the most important thing in my life,” one the top five attitudes cited in the survey. Mintel actually suggests that the ability to keep in constant touch via text and FaceTime “has led to easier communication and closer relationships between generations.”
Friendships still seem quite important, with Gen Z sometimes considering friends part of an extended definition of family, according to Mintel.
This isn’t about warm fuzzies, but influence. Studies show as well that friends and family have some sway over Gen Z brand preferences and attitudes.