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Gen Z Wants FinTech on Their Terms

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October 4, 2021
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October 4, 2021
Gen Z Wants FinTech on Their Terms

Let’s talk about Generation Z, the crafty name marketers coined for the demographic younger than millennials. FinTechs and financial institutions have their sights set on Gen Z. Many of them are graduating, gearing up to join the workforce, and are ready to invest! Well, not so fast. Many Gen Z-ers are saddled with crippling student debt and struggle to find jobs that offer basic needs like healthcare and retirement plans. In addition, let’s not forget that Gen Z grew up with a pretty unstable view of the financial world. So, how can FinTechs help quell mounting fears of the market?

Gen Z is not about to let money troubles get them down. According to a recent report by Rave Reviews, 13 is the average age that Gen Zers begin researching financial planning. Out of the polled group, 60% of Gen Z already had a savings account, and 35% had enrolled in a financial class of some sort, surpassing the financial literacy goals of Millennials (12%) and Baby Boomers (16%). What’s more, 89% say planning for their financial future makes them feel empowered. Businesses have noticed these behavioral changes, especially since Gen Z will make up 40% of consumers by 2020. Moreover, Gen Z is entering adulthood at a time when banking and financial planning look a lot different than they did just a few years ago. A young, consumer-led FinTech revolution has emerged, and mobile banks, money-tracking apps, and digital investment platforms are thriving, and FinTech solutions are being developed with teenagers in mind.

There’s been a dramatic increase in apps and platforms that cater to Gen Z, giving the younger generation early access to basic principles around financial planning. Let’s look at a few that are doing it right:

Amazon Teen: It’s no surprise that Amazon is a leader on this list. They’ve already won over the hearts and bank accounts of most adults, so why not appeal to teen shoppers? With Amazon Teen, young shoppers can create their own accounts and link them to their parents’ accounts to buy items, stream videos, and tap the other benefits of their parents’ Prime membership—all with their parents’ permission, all while teaching Gen Z independence and responsible shopping habits.

FinX Mobile: Gen Z has taken financial literacy into their own hands with this app. Designed by a 20-year-old and his baseball teammates, the app takes the sometimes-dry subject of financial literacy and aims to make it accessible, especially to the 17-to-25 demographic. In addition, it utilizes a format that young users will be comfortable with: a newsfeed that delivers unique content, including videos, articles, and quizzes. Upcoming features include weekly competitions with prizes and, eventually, a micro-investing platform.

Sezzle: This rapidly growing startup is looking to empower the next generation. Sezzle is an alternative payment platform that increases sales and basket sizes by enabling interest-free installment plans at online stores. Consumers pay over time, but merchant partners are paid upfront, eliminating the risk of fraud or non-payment. When you pay with Sezzle, your purchase is split into four interest-free installments automatically scheduled over the next six weeks. It's a financially responsible way to pay overtime and build credit. The Credit Card Act of 2009 barred those under 21 them from getting a credit card without an adult co-signer who can pay off the new credit line, so when young people finally need to access credit to buy a car or house, their credit rating may be poor because they don’t have a credit history. Think of Sezzle as training wheels for credit.

Cash App: This super-intuitive, free peer-to-peer payments app is similar to Venmo, with an even easier sign-up process. Recently, they dropped big news that they were launching Cash App Investing. Users can now invest their cash in stocks using the app. The app allows investors to purchase fractions of any stock as low as $1. With Gen Z being a much more frugal demographic, this move is genius because it lowers the price barrier of entry for low-income earners to invest in the stock market.

It’s never too early to start understanding the value of saving and investing. Gen Z is entering the workforce expecting that FinTech will help them manage their finances. This important demographic will continue to reshape and redefine the digitization of financial services.

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