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MONEY'S TOO TIGHT TO MENTION - whitepaper by Fitzroy.pdf

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GEN Z AND THEIR MONEY TREE
MON€Y’S
TOO TIGHT
TO MENTION
GEN Z AND
THEIR
MONEY
TREE
2 BACKGROUND
To get a better sense of how the young
Dutchies view money matters, we plunged
int...
CONTENT
BACKGROUND
METHODOLOGY
GEN Z MINDSETS
THE RISE OF NEW LUXURY
GREEN HEDONISM & SOCIAL BANKING
4 MONEY PARADOXES
A F...
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MONEY'S TOO TIGHT TO MENTION - whitepaper by Fitzroy.pdf

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Right now, there is a new generation of people on the threshold from an innocent thoughtless existence to the real deal. Gen Z is growing up and this grown-up reality involves money. Young adults seem
torn and almost schizophrenic in their stance on this. On one hand, they have a childlike optimistic outlook on life yet, on the other hand, they’re hyper-aware of the unstable context they’re living in. Some prioritise security and stability, while a cohort of entrepreneurial spirits claim they will never work for a boss in a nine-to-five job.
We dug deeper and found several other tensions around money. We call these tensions, The Money Paradox.

Right now, there is a new generation of people on the threshold from an innocent thoughtless existence to the real deal. Gen Z is growing up and this grown-up reality involves money. Young adults seem
torn and almost schizophrenic in their stance on this. On one hand, they have a childlike optimistic outlook on life yet, on the other hand, they’re hyper-aware of the unstable context they’re living in. Some prioritise security and stability, while a cohort of entrepreneurial spirits claim they will never work for a boss in a nine-to-five job.
We dug deeper and found several other tensions around money. We call these tensions, The Money Paradox.

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MONEY'S TOO TIGHT TO MENTION - whitepaper by Fitzroy.pdf

  1. 1. GEN Z AND THEIR MONEY TREE MON€Y’S TOO TIGHT TO MENTION
  2. 2. GEN Z AND THEIR MONEY TREE 2 BACKGROUND To get a better sense of how the young Dutchies view money matters, we plunged into their mindsets. We started with in-depth desk research to figure out the overall outlines of these mindsets. And to validate our outcomes, well - we asked them (100 of them, between the age of 16-29 to be precise). Right now, there is a new generation of people on the threshold from an innocent thoughtless existence to the real deal. Gen Z is growing up and this grown-up reality involves money. Young adults seem torn and almost schizophrenic in their stance on this. On one hand, they have a childlike optimistic outlook on life yet, on the other hand, they’re hyper-aware of the unstable context they’re living in. Some prioritise security and stability, while a cohort of entrepreneurial spirits claim they will never work for a boss in a nine-to-five job. We dug deeper and found several other tensions around money. We call these tensions, The Money Paradox. METHODOLOGY 3 METHODOLOGY ‘‘I really do see money as a stress factor. Not because I can’t make ends meet, but because I am only now beginning to realise how expensive everything really is.’’ LARA, 19, AMSTERDAM
  3. 3. CONTENT BACKGROUND METHODOLOGY GEN Z MINDSETS THE RISE OF NEW LUXURY GREEN HEDONISM & SOCIAL BANKING 4 MONEY PARADOXES A FRAMEWORK FOR THE FUTURE OF BANKING FINAL TL;DR 2 3 8 16 24 28 58 72 4 CONTENT
  4. 4. Gen Z is the most diverse generation up until now. So, how does one go about capturing their mindsets? Well, let’s start by asking, what unites Gen Z? This generation has digital DNA and has no perception of the world before the Internet. They are globally wired and wise beyond their years. Even though they are still at a tender young age, this cohort is already guiding older generations in how to be inclusive and how to find inner balance in a hyper-connected, fast-paced world. And then, of course, there’s one more thing they all agree on: They believe they’ll never be able to afford most of the things they want most in life. Gen Z grew up during brutal financial times: climate- and corona crises leaving a mark on their awareness. This is also a generation that values equality, diversity, and authenticity. The prevailing image is that, partly due to the impact of the crisis on their younger years, they are looking for security in their lives - and thus financial security. High student debts and the current housing- and labour market add to this. It’s not an easy time to get a handle on financial matters. Our research confirms this, with highly polarising answers from our respondents. For some, trust in institutions has fallen and they demand a fundamental system change, while others cling on to these structures and institutions to get a sense of security and grip as they figure out their financial situation. WHO IS GEN Z 7 WHO IS GEN Z
  5. 5. THE SPIRIT OF GEN Z CAN BE CAPTURED WITH THE KEYWORDS: FLUID, FRAGILE AND FIERCE. GEN Z MIND- SETS
  6. 6. FLUID Gen Z has grown up in a “phygital” world free from labels. 50% of Gen Z believes traditional gender norms are outdated. Young adults today take a much more fluid approach to sexuality and see gender much more as a spectrum than something that is limited to binary structures. They are glocal citizens. This means they value local products, communities and experiences. Yet, at the same time they can easily feel closely connected to someone across the globe with a completely different background. Because these days, a shared mentality is what binds tribes and communities together, rather than demographics. IWWIWWIWI is their credo. It stands for I want what I want when I want it. This goes beyond instant gratification and extends towards the desire for seamless services and an uninterrupted flow in everything they do. FRAGILE 94% of youth finds it difficult to be young. The reason, they explain, is that Gen Z is hyper-connected and hyper-aware of the f*cked up world around them. Bad news, good news and the fabulous lives of their peers are hard to ignore. Hence many young adults feel restless and suffer from infobesity. Their eyes are working overtime, while their other senses are understimulated. This is to say, in a world that is always on the go - sometimes they just want to go slow and have deeper and more tangible experiences. 10 CHAPTER 1 - GEN Z MINDSETS 11 CHAPTER 1 - GEN Z MINDSETS TAKEOUT TAKEOUT • Think beyond the binary • Empower glocal communities • Get phygital - tech is great but put the human touch first • Keep it simple • Offer multisensory escapes • Help them unwind and find peace of mind
  7. 7. FIERCE Even though Gen Zers feel fragile, they are activist and purpose driven. And quite fiercely so. You could say that they’re in a state of live and let live. The fierce mindset stands for a kind of unapologetic authenticity. It’s about owning who you are and standing up for what you believe in. It’s also a non-judgemental mindset whereby Gen Z empowers others to be true to themselves too. This translates into an uncompromising set of expectations towards brands. In short, Gen Z expects brands to do better, without being boring! Put a hedonistic spin on ‘doing better’ because Gen Z does not want to compromise on enjoyment. They embrace bold brands that take a stand for what they believe in. The aim here is not perfection but brutal honesty and hyper transparency - oh, and that goes for both brands and individuals by the way! 12 CHAPTER 1 - GEN Z MINDSETS TAKEOUT • Be an inclusive safe-haven for diversity and give new voices a platform • Be authentic and unapologetic. Own who you are as a brand • Act don’t ad
  8. 8. We do so by investigating the changing face of luxury. NOW THAT WE KNOW WHO GEN Z IS AND WHAT THEY STAND FOR, IT’S TIME TO HAVE A LOOK AT WHAT THEY CONSIDER VALUABLE. 14 CHAPTER 1 - GEN Z MINDSETS 15 CHAPTER 1 - GEN Z MINDSETS
  9. 9. THE RISE OF NEW LUXURY OVERALL WE SEE A SHIFT FROM MATERIALISM AND FANCY ITEMS, RESERVED FOR SPECIAL OCCASIONS TO A NEW KIND OF LUXURY THAT’S ALL ABOUT THE INTANGIBLE STATE OF FEELING LUXURIOUS. New Luxury emphasises more intrinsic values, rather than external affirmation.
  10. 10. 18 19 CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING EMPOWERING AUTHENTIC SELF PERSONALISED EXPERIENCES Luxury today is becoming less about the luxury brands themselves and more about enabling people to become more of who they are. Because of globalisation and mass production, more people can afford to own more things than ever before. But the more we can buy, the less it means to us. This is why the new generation is in active search for meaningful, exclusive experiences. • Individuation and rise of the authentic self • Seeking new ways of being as opposed to owning things • Facilitating self-discovery, self-actualisation and self expression • Creating meaningful experiences and unique memories • Connecting with others and deepening our relationships • Curating bespoke, immersive and transformative luxury experiences Shift from selling luxury goods to empowering new identities and individual lifestyles. Shift from personal luxury stuff to tailor-made experiences. WHAT DOES IT MEAN WHAT DOES IT MEAN KEY DRIVERS KEY DRIVERS 01 02 EVERYDAY ESSENTIALISM SPARKING CULTURAL CHANGE Luxury is becoming more everyday through little moments of joy in our everyday lives. You may not see this luxury right away - but the user can certainly feel it! It’s about making the ordinary extraordinary and about the art of knowing the difference. The need for brands to be vocal on social or political issues is on the rise. Banks and financial services too are expected to make social statements and to be hyper transparent about it! • Democratised access to luxury and high quality • Self-love, enjoyment and gratitude • Mini-escapes from a f*cked up world • Challenging cultural values and ideals to evolve the status quo • Ethical Production: Making good choices for the planet • Sustainability: Inspiring new conscious patterns of consumption Shift from excess to everyday luxury. Shift from luxury consumption to being part of cultural change. WHAT DOES IT MEAN WHAT DOES IT MEAN KEY DRIVERS KEY DRIVERS 03 04 18 CHAPTER 2 - THE RISE OF NEW LUXURY 19 CHAPTER 2 - THE RISE OF NEW LUXURY
  11. 11. In a bold move, IKEA is democratising solar energy. IKEA U.S. and SunPower Corp., a leading residential solar technology and energy services provider, recently announced that they are teaming up to make solar energy easier to access. Through this collaboration, members of the IKEA Family customer loyalty program will be able to purchase home solar solutions, available through SunPower, to generate and store their own renewable energy and live more sustainably. BEST PRACTICE: IKEA Flatpacks, Meatballs & Solarpower With their ‘More cash. Less carbon’ approach, they’re helping consumers to make better decisions. With the new FutureCard Visa Card, you get rewarded for spending with a lower carbon footprint. By offering 6% discount on all climate-friendly purchases, such as vegan meals or using public transport, they are steering their users in the right direction to a better way of spending. BEST PRACTICE: FUTURE CARD Visa is tapping into these New Luxury mindsets by making fighting climate change personal. CHAPTER 2 - THE RISE OF NEW LUXURY CHAPTER 2 - THE RISE OF NEW LUXURY 20 21
  12. 12. 22 23 CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING 22 CHAPTER 2 - THE RISE OF NEW LUXURY SO, MORE THAN EVER A GENERATION OF YOUNG ADULTS IS MANIFESTING PERSONAL VALUES AND BELIEFS THROUGH THEIR CHOICE OF LUXURY. How does this affect the financial services sector? The result is a shift in the financial services sector characterised by a surge in ESG investing. More in the next chapter. 23 CHAPTER 2 - THE RISE OF NEW LUXURY
  13. 13. GEN Z WANTS BANKS THAT HAVE THE SAME IDEALS AS THEY HAVE. That’s why they are open to challenger fintechs with clear Environmental, Social & Governance goals (ESG). GREEN HEDONISM & SOCIAL BANKING
  14. 14. Investment startup Alinea is what happens when you mix TikTok with Spotify and Robinhood. The app, aimed at young women is a perfect example of how fintechs can help younger investors to get to know the financial world and make a positive impact with their money, without making it too complicated. The app already has thousands of users, most of whom are young females. Alinea has broken down the wall around the unapproachable and overwhelming stock market by enabling this generation to (l)earn money in a way that is educational and fun. Of course, design plays a vital part in this. BEST PRACTICE: ALINEA APP 26 CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING But ESG is not just for challenger fintechs, traditional financial organisations can also take action to attract Gen Z and make a difference together. The Dutch ASN Bank helps sustainable companies to grow by helping entrepreneurs to realise their innovative, sustainable ideas. They do so with the ASN Bank World Award and through their online platform For the World of Tomorrow, showcasing articles about green trends and developments that inspire to become a little more sustainable. Until now, the focus of ESG investors has been primarily on renewable resources and recycling, but it can go way beyond that. By additionally offering valuable and more individual-oriented services that have a direct impact on the lives of consumers, you can attract this new generation and build a strong connection with them. By tapping into their mindsets and behaviour, Alinea created a hybrid and lively atmosphere where you can explore several fields, make an ‘investment playlist’ and share knowledge with your friends. Users can take a personalised quiz, asking about their “investing personality”. So they will be asked if they want to invest in female-founded companies, climate-focused firms or black-empowered businesses. After the quiz generates a personalised basket of stocks dubbed a “playlist,” users can search playlists created by others, including their friends. Alinea wants the next generation to know that investing should be a part of your wellness, your financial wellness, and it should be something you should be doing regularly and responsibly. 27 CHAPTER 3 - GREEN HEDONISM & SOCIAL BANKING
  15. 15. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). THE MONEY PARADOX SHOWS 4 DIFFERENT DILEMMAS THAT YOUNG PEOPLE STRUGGLE WITH WHEN IT COMES TO MONEY. They are all different but have one thing in common. In every paradox, young people are striving for some sort of security and peace of mind. The same motivation, different approach. This chapter investigates 4 paradoxes, which currently play an important role in the lives of Gen Z globally. A fifteen-minute read will provide insights into the financial world of this important group. Get ready to find out what the money habits of Gen Z mean for your business. Want to cut down on the reading time, just skip to the TL;DR (too long didn’t read) section at the end of all chapters. THE MONEY PARADOX
  16. 16. ‘‘A 9 to 5 job does not really appeal to me. I prefer being my own boss and I want to do something adventurous.’’ INGRID, 19 9 TO 5 VS ENTREPRE- NEURSHIP PARADOX 1 Due to financially insecure times, Gen Zers seek financial stability in two very different ways: Some embrace the entrepreneurial spirit and make non-realistic, risky choices while others yearn to settle down and seek the structure and security that a steady job can provide. Gen Z is the first generation that will most likely be less financially stable than their parents. They live in a stressful reality with student debts, no possibility to buy a house, and inflation going on. They feel like they need to do a lot to achieve that feeling of being successful and at the same time they’re always comparing themselves to peers, YouTubers and Influencers. This adds to their stress and ever-growing drive to ‘make it’. SHIFT CONTEXT 30 CHAPTER 4 - THE MONEY PARADOX are anxious that a 9 to 5 job is not enough for them to achieve their financial goals. 62%
  17. 17. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). Social media nowadays is full of 20-something-year-old bitcoin millionaires showing off their excessive lifestyle and TikTok famous ‘finfluencers’ giving investment advice. Gen Z is bombarded with the ‘fast money myth’ which is often in support of the self made entrepreneur. Making young people very susceptible to the idea of getting rich quickly. Gen Z grew up seeing 10 year old Ryan Kaji earning loads of money on Roblox and NFTs. Digital platforms give them a way to spend and make money. Growing up in the digital era and seeing others succeed as a ‘me brand’ feeds that drive. Social media does not only influence them to buy the newest pair of designer sneakers or go out to fancy dinners and parties, but also to make more risky financial choices or start their own business. money, such as a social media career or investing in crypto, are at least as effective and profitable as a traditional job. of our respondents think that new ways of making 55% 32 CHAPTER 4 - THE MONEY PARADOX Of course, financial security can be achieved in different ways. While some are diving into the brave new world of crypto, others take a completely different approach to success: playing it safe and going for security. Let’s look at what drives this half of our cohort. For many, a desk job initially seems like a slower, less effective way to earn money. But for 45% of our respondents having a steady job is the way to go. When asked why, the answer is quite surprising. They told us that having a steady job provides them with the structure, financial back up and feedback needed to take their time and figure where their strengths lie. 33 CHAPTER 4 - THE MONEY PARADOX
  18. 18. 34 CHAPTER 4 - THE MONEY PARADOX A 9-to-5 lifestyle used to provide the income stability to make ends meet. But our respondents told us that even with a steady revenue stream, they are still concerned that it won’t be enough. A large part of Gen Z feels pressured to set up a sidehustle next to their steady income. And this is an area in which fin-tech brands could really add value. THE SIDE HUSTLE GEN Now imagine Will Ferrell being the spokesperson for that same app. This is exactly what the Danish app Lunar did. The result is a visually appealing single platform for all your finances. It takes a consumer friendly approach by providing insight and control over your finances. The tone of voice, the seamless customer flow and sense of humour feel a lot closer to Gen Z culture than anything else we’ve seen. BEST PRACTICE: LUNAR APP Imagine a fully digital bank focussing on ‘financial zen’. 35 CHAPTER 4 - THE MONEY PARADOX Keep in mind that not all Gen Zers are influencers with massive followings. So there’s an opportunity here for financial services to step in. Could you: • help monetize and manage their side hustle? • help them reach their audience? • offer education and training? • invest in their endevours?
  19. 19. TL;DR: • Gen Z is stressed out about the current financial reality. 62% are concerned that even with a 9 to 5 job they won’t be able to make ends meet. • It’s time for the financial sector to step in and contribute to a passion economy that goes beyond the influencer elite. • The drive to be successful can be dangerous and is not always realistic. Financial institutions could help young adults by painting a more realistic picture of the risks involved for entrepreneurs. • Young consumers are triggered by the instant gratification incentive. This is simply how their brains are wired. Help them gain insight into the long-term consequences of their (financial) choices. • Take a more holistic approach to financial well-being. • Focus on personal growth and engagement for your young employees. And keep the feedback loop open and ongoing. This way employees will feel seen and have the instant gratification of constantly moving forward, even if just a small step at a time. 36 CHAPTER 4 - THE MONEY PARADOX
  20. 20. ‘‘Money should be spent. I live in the moment and don’t really think about the future financially. But I know a lot of my friends don’t think this way.’’ INGRID, 19 SAVING VS SPENDING PARADOX 2 There is a dichotomy taking place within Gen Z when it comes to spending habits, with half not thinking about the future and the other half too much. Young people are generally not known for having well-stocked savings accounts. Simply because they don’t have a large income and often have a ‘money must flow’ mentality. However, our research, indicates that Gen Z is more pragmatic and penny-wise than one might think. SHIFT CONTEXT 60% say they would rather save money than spend it. 38 CHAPTER 4 - THE MONEY PARADOX Young people are wired for instant gratification. They want more immediate rewards than those in the future. The more they disregard their longer-term interests in favour of instant gratification, the more chance the overspending problem will occur. Sounds logical right? Well, there’s actually a big group of saving-savvy Gen Zers (60%) who say they would rather save money than spend it. This urge is an immediate reaction to the several (financial) crises going on in their young years leading to a need for security, independence and control. say that they’re stressed by the crisis and that they’re saving for an unpredictable future. 66%
  21. 21. For starters, many were raised in households where no one was counting on financial stability. 54% of the Gen Zers we spoke to, have seen family members struggle due to the financial crisis of 2007-2009, then again during Covid and now yet again with the ongoing inflation. Gen Z wants to avoid similar financial challenges down the road. Second, Gen Z was raised in households where there was a need to save for retirement. This generation plans to retire at an earlier age, so this may explain why they’re already being so sensible. Third, the current perception is that you’re on your own and that you need to start saving early. When asked what they are saving for, our respondents said they save for future unforeseen financial difficulties, for a house, or simply for peace of mind. For example, 59% of Gen Z check their bank account at least once a day on their banking app. These apps provide structure and insight into their financial situation and allow them to be one click away from checking their balance or moving their money between saving accounts 24/7. WHY GEN Z SAVES There are three factors that drive Gen Z to save: 40 CHAPTER 4 - THE MONEY PARADOX With their holistic approach to financial planning, they lead the way to financial health. Trim not only provides insight and overview into your day-to-day finances but also functions as a negotiator and control tool. Trim users don’t have to read boring bank statements or contracts as the app does all this for you. It cancels subscriptions, negotiates lower rates, resulting in 30% more savings. BEST PRACTICE: TRIM APP Saving isn’t always easy but the Trim app is here to help. 41 CHAPTER 4 - THE MONEY PARADOX
  22. 22. TL;DR: • Young people do not take financial health for granted. • 66% of Gen Z are stressed out by the current context. And even with a full time job they’re and concerned about making ends meet. • Gen Z has witnessed financial struggles from up close and this has made a large group wise beyond their years. • 60% say they would rather save money than spend it. • Gen Zers check their bank accounts at least once a day! Consider what you could do to add value to those touchpoints! 42 CHAPTER 4 - THE MONEY PARADOX
  23. 23. ‘‘I’m only 18 and don’t know much about finances yet, but my mom knows enough so I trust her and don’t worry about it that much.’’ MATS, 18 COPY PASTE VS CLEAN SLATE PARADOX 3 Young people either copy or oppose the financial behaviour of their parents, in both cases, the role and influence of parents. Young people learn the most about money from their parents. International literature shows that parents influence students’ financial behaviour in various ways. The direct teaching of money matters, as well as the parents’ own financial behaviour, appear to have a great influence on the student’s financial behaviour. SHIFT CONTEXT Most of Gen Z (58%) usually goes to their parents for financial advice. 44 CHAPTER 4 - THE MONEY PARADOX 45 CHAPTER 4 - THE MONEY PARADOX Since the majority of this generation (58%) usually goes to their parents for financial advice, it’s not odd that we’re seeing a copy- paste culture between parents and their kids, when it comes to handling finances. For example, 80% of the children think that other things are more important than money if their parents think so too. And if parents think that money should roll, well then the kids will agree. Specifically, 53% agree compared to only 15% if the parents are more careful and prefer to save. When it comes to lending or borrowing money, a whopping 92% agree with their parents about the rules for this. So, this would mean that young people often have the same opinions about money as their parents. Right? Well, as expected, there is another side to the story. The characteristic of adolescents is that they detach themselves from their parents. They want to make their own decisions and they want to experiment and need more freedom to do so. Adolescents rebel against their parents. They become more sensitive to the opinions of peers and also to things like social media and advertising. This may result in them also rebelling against the way their parents deal with money-related issues. Parents’ significant influence on the choice of financial products and services for young people should not be underestimated. But, a part of Gen Z is also in a phase where they try to be the opposite of their parents. 58% say they would like to have more tools that provide insight into their financial situation and possibilities so they can become more independent on money matters. Mainly to get more insight into investing, taxes, saving and buying a house. So how to learn this without the guidance of a parent? Although screen time is often seen as a bad habit, video games can be a way to educate them in a way that’s neither boring or financially risky. Finances are new, and frankly a boring subject for many Gen Zers. Gamification can provide a solution and can teach young people real-life skills in an accessible, easy-to-understand way.
  24. 24. Enter Fintropolis; a financial literacy gaming experience built within Minecraft. The app is viusally appealing and approachable thanks to the use of beautiful, colourful illustrations. Players are introduced to basic financial concepts like cash flow, budgeting, taxes and investing through real-world scenarios. Teachers are encouraged to integrate Fintropolis into lesson plans. The game was released in July 2021 and has been downloaded more than 3 million times and the education edition is being taken up by 7,000 schools across the country. BEST PRACTICE: FINTROPOLIS Ask Gen Z and they’ll tell you that financial literacy needs a new approach. 46 CHAPTER 4 - THE MONEY PARADOX Kids can keep track of their money. Get a clear overview of how they earn, save, spend and invest their money. BEST PRACTICE: MYMONII The MyMonii app enables children and young adults to become better at saving and learn about economics. 47 CHAPTER 4 - THE MONEY PARADOX
  25. 25. TL;DR: • It is important for young people to be able to make their own decisions about money, based on reliable knowledge. • 58% of young adults go to their parents for financial advice. • 58% say they would love more new tools in ordert to be more financially independent • Parents do not always set a good example when it comes to finances. Yet, kids are likely to copy their behaviour anyhow. Therefore it’s important to provide them with alternative tools, such as educational games • Look beyond the traditional codes of design and communication. Support and educate young people in developing their own financial path, show them different possibilities to financial security in a (fun) way they understand. 48 CHAPTER 4 - THE MONEY PARADOX
  26. 26. “I am currently looking for a job. I don’t even care which field, I just want to vibe with the company culture and want them to contribute to what I find important.” JULIA, 23 COLLECTIVE VS INDIVIDUAL PARADOX 4 A job must match Gen Z’s values and goals, not the other way around. According to market researcher Klaus van den Berg, many young adults embrace the idea of self-spirituality. They believe that life is all about authenticity and discovering your true self. How does this translate onto the workfloor? Gen Z is more concerned with what they want for themselves than for a company to get a good picture of them. SHIFT CONTEXT 50 CHAPTER 4 - THE MONEY PARADOX 85% even say that the company they work for needs to have the same values as they have for them to go work there. A high sense of individualism results in the desire to determine one’s own destiny. They are highly driven and want to achieve their goals. However, this also has a downside. The goal is often considered more important than the people or the company, according to Veerle Martens, Chief Marketing Officer PlaytoWork, Gen Z is more like ‘there are a hundred others’, when it comes to a job. They are much more concerned with what they want themselves than what companies think of them. When a job does not contribute enough to personal development, a Gen Z’er is likely to move on pretty fast. For 91% of our respondents, personal growth is as least as important as climbing the corporate ladder. This behaviour has a big impact on their financial situation since 41% also say that the representation of their personal values is more important than the money they make. The question is whether companies will adapt to the wishes of Generation Z in the future, or whether Generation Z will eventually adapt to the business world after all. 91% think that in a job, personal growth is as least as important as climbing the corporate ladder. 51 CHAPTER 4 - THE MONEY PARADOX
  27. 27. They’re looking for values-based communities that can provide for different needs such as a drive to challenge yourself and the feeling of having an impact on a personal or community level. Building a community is not very common yet in the commercial finance sector. Young fintech fans find this sense of belonging in the blockchain. Community members feel like they’re part of something bigger, something new and exciting that challenges them. COMMUNITIES HELP CULTIVATE THE INDIVIDUAL Gen Z and Millennials are constantly finding new communities that shape their sense of self and amplify a sense of belonging. 52 CHAPTER 4 - THE MONEY PARADOX The Rola app provides insights from AI predictions from the best crypto analysts but is also a social media app where you can chat or play games with other community members. It even rewards you for having social interaction with other community members. BEST PRACTICE: ROLA APP Rola is an anime-inspired and AI-based crypto community app. 53 CHAPTER 4 - THE MONEY PARADOX
  28. 28. TL;DR: • Young people are attracted to companies with strong communities, activities, products, and services • Attract young talent by offering work that is interesting and challenging, in which the person can develop, and which offers new career opportunities within the company • 85% want to work for a company that aligns with their own values • Show how you pursue your goals as a company so they can get a clear idea of how it can help to contribute to a better world and how they can be part of a community they share values with • For a whopping 91% of Gen Z personal growth is the most important incentive to work for a company 54 CHAPTER 4 - THE MONEY PARADOX
  29. 29. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). Due to rapid technological developments, the competition in banking and fintech is fierce. Because of this, the standards of consumers are becoming higher, and traditional banks without all the conveniences of challenger banks don’t cut it anymore. Banks can’t ‘just’ offer a way for consumers to pay and store their money somewhere. To survive, it has to be a full-package deal. Including modern financial practices like budgeting tools, instant spending notifications, and opportunities to invest your money. The bar hasn’t only been raised in terms of convenience and customer service, but also when it comes to being green, having fun and bringing in a fresh perspective. International, digital banks are adding game-like features to their banking apps, and consumers seem to like looking at the hordes who have signed up to demonstrate similar apps. These current trends are tilting the competitive playing field towards areas where neo-banks enjoy advantages. The traditional banks that will better leverage this digital transformation change, place their customers in the centre of attention, and provide them with outstanding customer experience, are the ones who will survive. THE CHANGING ROLE OF FINANCIALS 57 CHAPTER 4 - THE MONEY PARADOX
  30. 30. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). GEN Z IS FUNDAMENTALLY DIFFERENT FROM PREVIOUS GENERATIONS. In a nutshell, they’re advocates for inclusivity, authenticity and green hedonism. And now they want to know what you stand for as a company. NEW RULES FOR FINANCE: A FRAME- WORK
  31. 31. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). These themes resurface when talking to Gen Z about luxury. It’s a feeling, a part of their everyday lives. Less showy and more intrinsic. The role of banks too is changing, which means that to engage this new generation of consumers, you must rethink your approach. This framework will help you to adapt to these new needs and expectations. It covers all the aspects of a strong and impactful concept: story, people, services, space, identity, content, and channels. To create a future-proof and coherent approach. NEW RULES FOR FINANCE: A FRAME- WORK 61 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK
  32. 32. STORY 62 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK As we discussed earlier, Generation Z is fiercely purpose-driven and embraces brands and organisations that align with their personal values and goals. Remember, your story should be unique, ownable and impossible to copy. If you’re repositioning an existing brand, a good place to start is to consider if there is an element in your brand heritage that would resonate with this generation. Either zoom in and empower them in their individual goals or zoom out and invite them to be part of a bigger movement related to ESG goals. Whatever your story make sure that you communicate it clearly and that you act on it rather than just advertising it. No green washing allowed! Positioning, Role & Purpose PEOPLE 63 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK For this generation, a community-driven approach is key. This part of the framework - naturally - is about the connection between all people involved. Customer service is an important part of the whole brand experience when it comes to Gen Z, but goes way beyond fixing complaints and answering questions through a chatbot. Create an environment where people are encouraged to socialise, share their ideas and build bridges to become socially relevant for them. As mentioned before, Gen Z has a voice and they demand to be heard. So, the focus should be on actively interacting with them. The community-driven approach is all about building a network that facilitates collaboration and improvement on a personal and communal level. Target customers, Employees, Partners & Investors
  33. 33. SERVICES The services your company provides, should enrich the customer experience and contribute to your story. Technology is a significant aspect of these services. It can both be used to personalise different touchpoints and make the entire customer journey feel seamless. To create engagement and provide full, overarching service, it’s good to build bridges between all kinds of financial services such as investing, saving, and taxes. The goal of this element should be to provide clarity and overview. But how about taking it one step further and taking a more holistic approach. We know that Gen Z is anxious about money matters, so consider how your brand could provide financial zen - perhaps through (personal) guidance and education. Service mapping, Customer services, Touchpoints (digital and analog) 64 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK SPACE Gen Z has high tech-spectations when it comes to space and consumer flow. Their emerging need for insight and overview shows that the overall flow should primarily be smooth and understandable, by providing just the right amount of information and guidance. But keep in mind that community, personal growth and wellness are essential to Gen Z. So, the space shouldn’t only be an (anonymous) techy, functional zone. Multifunctionality, sensory experiences and biophilic design principles are key here. The space should feel like a guestfree community hangout, where you can get in touch with others, ask questions, get some personalised advice, and overall get inspired by new, surprising elements such as multi-sensory and hyper-tangible experiences. Zoning, Customer flow, Design 65 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK
  34. 34. IDENTITY To get the attention of Gen Z, a step back from traditional design codes and other identity elements is needed. The financial world is often perceived as complicated, dusty, outdated, boring and unapproachable. Elements such as gamification and a more relevant and appealing look and feel are essential to make money matters easier and more accessible for them. If you missed it the first time around, while reading this paper, then have a look at Lunar now for an example of a bold fintech that has really broken with the rules of the category. Naming, visual- & verbal identity, sounds & smells 66 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK CONTENT The content aspect of the framework includes everything you do to communicate your brand story. It can be anything, from blog posts to podcasts and from Instagram pictures to in-depth informative website articles. Important here, is that everything aligns with your story and that it’s consistent with your brand identity. This will help you to manifest the different components of your brand and to create an overarching idea of your brand’s position in the market. Content is all about connecting with your audience. All content must be focused on adding value and personality to your brand and answering to the needs of your audience. Therefore, inspiration and information must be combined at all times. Consider when and how you need to share financial expertise and then consider when the time is right to inspire on broader themes (the things that really matter to Gen Z). Remember, money matters is just one building block in the overall well being of your customers. Involving the right people at the right time is the second essential element of content creation. Collaborating with influencers and fintech communities that align with your values creates a connection with the target audience. Content & Messaging themes 67 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK
  35. 35. CHANNELS Channels launch your story into the world. From digital to real-life spaces, channels are the touchpoints with your audience. By using all these mediums in the right way, you can create engagement so your brand can be seen by the prospective consumer in a profitable way. Digital channels like social media posts are usually the way to get that first impression of the brand and build interest. They can be anything, from a youtube series with challenges between influencers or an informational series to a branded game where the community can come together and learn in a fun and interactive way. But, due to an overload of digital information, it’s hard to create an emotional connection with your target group via online communication. So once you’ve got their attention, real-life channels are essential to building that deeper relationship with your customer. Events or a physical space where your consumer can experience the brand can help to build that brand image that you want and create a personal connection with them. This connection can be strengthened by a relatable or aspirational spokesperson who can give the brand a personal and human touch. The last component of our framework is channels. 68 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK Using events or social media can help to answer the specific needs of your target group. For this group, it’s mainly providing overview, insight, and information. Depending on your story and concept, you could organise an event where multiple experts come together to share their experiences and knowledge or create a podcast to host conversations about related topics. Keep in mind that channels such as TikTok are embraced by this target group and can be used in new and relevant ways to engage Gen Z. Have another look at the Alinea app, which targets Gen Z women and brilliantly leverages TikTok to get their message across. 69 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK
  36. 36. MONEY’S NOT TOO TIGHT TO MENTION Gen Z usually doesn’t think so! It seems they are willing to talk about money and their thoughts in an open way. This implies that money is no longer stigmatised or as defining for who you are as it was before. Spending money today is becoming less about prestige and buying expensive luxury brands and more about enabling individuals to become more of who they are. Showing us that money absolutely gives freedom, but in new, more mindful ways. It’s more about what you as a person can do with it, than actually having a well-stocked bank account itself. For Gen Z, money is an important piece of the bigger picture. So there’s an enormous opportunity for brands and financial institutions to step in with a much more holistic approach and ESG focus. So come on in and take the role of financial mentors, guiding this new generation to a state of financial security. So, is money really too tight to mention? 70 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK By creating an open, personalised space that will empower them to create their own paths in terms of financial independence. They can facilitate self-discovery and enhance the new sense of self by being both aspirational and accessible. A good balance between inspiration and education should be at the core of all the steps you make. So, build more meaningful, educational experiences, with which you can help this generation find their own route in the maze called the financial world. We’ll wrap this whitepaper up with one final TL;DR in case you want to give your colleagues, bosses or clients a quick recap: 71 CHAPTER 5 - NEW RULES FOR FINANCE: A FRAMEWORK
  37. 37. FINAL TL;DR: • Fluid means they want seamless experiences in a hybrid reality, free from labels and binary structures. • Fragile means they feel vulnerable in a chaotic world and unpredictable future. They embrace purpose driven brands and services that help them make the world a better place and help put their mind at ease. • Fierce describes the way that Gen Z is unapologetically authentic - and demand that brands are too. New Luxury is all about an intrinsic and intangible feeling than about material stuff. Brands can cater to this by: • Empowering authenticity; • Creating meaningful experiences that feel personal and tailor made; • Becoming an everyday essential item or service that makes Gen Z lives feel more seamless, fluid and uninterrupted; • Sparking cultural change. FLUID, FRAGILE AND FIERCE CAPTURES SPIRIT OF GEN Z NEW LUXURY 72 FINAL TL;DR Sorry. No short cuts or quick fixes here. Research showed us that Gen Z’s reaction to the uneasy context that surrounds them is polarising. • Some seek the structure of a steady job with the idea that this will offer security while they pursue their personal growth. Others have sworn that they will never work for a boss in their life. Whatever they choose, both camps are getting good at the side-hussle. • When it comes to spending versus saving, here too there’s a rough 50/50 split. Some live day by day and have little trust in financial institutions. Others have seen parents struggle financially and are coming to understand the reality of the housing market and the high living costs. Hence, a large cohort is playing it safe and is exhibiting sensible and more pragmatic saving behaviour. • Is Gen Z following their parents’ lead or rejecting it? Sorry, no straightforward answer here. It’s a 50/50 split. • Personal growth and collective growth go hand in hand. 91% of our respondents value personal growth over climbing the corporate ladder. And when it comes to choosing a job, 85% apply to companies that have the same values. Finally 41% think that a representation of personal values is even higher than their salary. So, the bar is set pretty high for brands, organisations and banks to take a stand and clearly formulate their purpose and ESG focus. Then try filling in each step of the new framework for financial services. Keep the Gen Z mindsets, the new luxury definition and the money paradoxes close at hand to make sure you tap into emerging mindsets of your future customers. MONEY PARADOXES READY TO GET TO WORK? 73 FINAL TL;DR
  38. 38. GEN Z WANT BANKS THAT HAVE THE SAME IDEALS AS THEMSELVES. That’s why they are open to challenger fintechs with clear Environmental, Social, & Governance goals (ESG). How Firms are benefiting from an ESG focus, Fintech Futures New Luxury, New Normal, High Snobiety Insights The Luxury Report, Meaning.Global Whitepaper, The Online Spending Behaviour of Youth, Fitzroy SoundBoard, Fitzroy’s handpicked minipanel of unfiltered Gen Z’ers SOURCES 75 SOURCES Questions or Comments? Feel free to reach out to pernille@fitzroy.nl
  39. 39. www.fitzroy.nl MONEY’S TOO TIGHT TO MENTION

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