Generation Z is the cohort most likely to seek out personal advice when it comes to buying a financial product, according to a new report by Target Group, the business process outsourcing (BPO) and operational transformation provider.
The findings form part of Target Group’s latest report, which examines the attitudes of consumers from across several generations, determining what is most important to them when looking for financial products and providers.
The study reveals that three quarters (73%) of Generation Z, those born between 1995 and 2010, go to parents first for advice on financial products, significantly higher than the proportion of Millennials (42%). Furthermore, some 43% of Generation Z ask their friends for advice, despite them likely being equally inexperienced in the world of financial products.
Target’s report also reveals that Generation Z is the least likely to use a comparison website when it comes to finding help choosing financial products and services – just 17% use these tools, compared to 34% of Millennials and 56% of Baby Boomers. This group is also the least likely to use conventional websites for research (44%), far outstripped by the 72% of Baby Boomers who use websites, and 60% of Millennials.
Furthermore, the report also looked into the future of financial services, with nearly two thirds (63%) of Generation Z saying they would feel comfortable managing their finances via a virtual assistant for managing their current account, setting up a new insurance policy, carrying out administration on their loan or mortgage, and handling their savings account.
However, according to the report, data is an area of real concern for Generation Z following high-profile cyber-attacks on big businesses in recent years. Indeed, 66% of Generation Z consumers cited data security as a factor which would make them stay with a savings account provider, with a 24/7 service coming second. Consequently, some 29% said they would not share personal data with their bank even if they received additional services or rewards as a result – the lowest proportion of any group – and a further 26% were unsure.
Ian Larkin, CEO of Target Group, commented: “The next generation of customers is beginning to reach maturity, displaying significantly different behaviours to generations that have come before them. Generation Z consumers are financially savvy, digitally adept, and place high expectations upon their financial services firms. Early on in their financial journey, they are looking to providers not just for top-notch service and easy access, but for advice and support.
“While other generations have a clear idea of what is important to them and how they want to access services, many of the responses from Generation Z are far more varied, suggesting they are still feeling their way in the world of finance and working out their priorities. As such it is crucial for providers to continue to develop and offer the multi-channel, hybrid approach used by Millennials, but adapt it to the need for advice from a less financially experienced audience.
“Generation Z may not yet prioritise the best interest rates and best value products to the same extent as their predecessors, but they do know what they want. Data security and trust are crucial for this generation, and the providers that are going to win in the future are those that take this point seriously and deliver substantial solutions that meet these expectations.”