Since 2015, the use of fintech tools among digitally active consumers has surged from 16% to 33%, expanding from basic payments to more sophisticated utilities such as financial planning, investment, and borrowing. Unlike traditional financial brands, fintech contenders such as Acorn, Stash Invest, and Petal have seized on digital to capture the new generation of investors.
Described as “less idealistic and less drawn in by immediate gratification than millennials,” Generation Z has shown enthusiasm for financial planning, with members typically using digital channels to educate themselves. Nearly 60% of Gen Z consumers save half of every dollar they make, as compared to about 50% of millennials and less than 30% of Gen X and boomers.
Fintech brands deploy various tools to capture this attitude, from actively pursuing visibility on unbranded search terms to optimizing mobile apps. Over 60% of search traffic to fintech brands is driven by broad queries like “how do I invest,” according to L2’s Digital IQ Index: Financial Services.
Additionally, fintech brands target Instagram users, an audience largely ignored by many traditional financial brands. As a result, they secure 31% of all interactions with financial brands on the platform. In contrast, traditional brands concentrate 84% of their post activity on more mature platforms like Twitter and LinkedIn — which, despite their professional relevance, generate just 22% of social media interactions with financial companies.
Following the lead of Acorns, whose sole focus on narrow investment areas has paid off, other financial brands are capitalizing on the new generation’s desire for simplicity and easy entry. Petal, a new credit card company for first-time credit borrowers that doesn’t require traditional credit scores, unveiled its first card last September and received $13 million in VC funding earlier this month.
With a more money-minded generation on the rise, financial brands should look towards maximizing transparency, accessibility, and digital presence if they want to retain relevancy with the upcoming generation.