Gen Z has presented FinTechs with plenty of opportunities, but failing to understand important aspects of this group could prevent businesses from capitalising on them.
Given they hold up to $143bn in spending power, it’s easy to see why FinTechs would be interested in the people born between 1996 and 2010.
Still, capitalising on this batch of would-be customers does not come without effort.
So, what are the five key factors to consider to seize the opportunities presented by Gen?
Firstly, FinTech entrepreneurs must realise that reaping the fruits of their efforts will take some time as many people in this age bracket are still not financially mature, according to new research from Business Insider.
Two out of three Gen Zers have a bank account, but many do not have debit card and an even smaller proportion have credit cards. This is mostly due to them not being in charge of their own spending yet, with many of them living at home.
Secondly, the young people are more willing to embrace digital payments than older generations, according to the same research. For instance, more than half of Gen Zers use digital wallets on a monthly basis and three out of four use digital payment apps.
Thirdly, in order to to attract and retain these customers, FinTechs must ensure they create services and solutions are social, authentic, digital-native, educational, offer value, and evolve over time.
The fourth factor to consider is people’s parents. While there is always an idea that teenagers are prone to rebel against their parents, recent research from Capco showed that 74% of Gen Z said their parents’ advice was the biggest deciding factor for them when picking a new bank. Other factors like product offers, free gifts or money and marketing held sway over 8%, 7% and 5% of people’s choices respectively.
The fifth thing to keep in mind is that Gen Zers are more likely to be a victim of fraud through confidence tricks, according to research from GlobalData. These tactics rely on building trust with a victim before they scam them out of funds. Essentially, young people are more likely to trust people, meaning they leave themselves exposed to fraud.
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