Focus on FinServ: Gen Zs are banking on their own financial wellness

Gen Zs are coming of age and beginning to consider their options as young adults—whether it be leaping into academia or traveling the world. As these big decisions weigh on their minds, financial services and insurance providers have the opportunity to coach, cheer on and champion this blossoming generation. Reaching this target audience effectively, however, requires a fresh strategy when it comes to financial services marketing.

Historically, the industry has leveraged traditional life stage markers to connect with consumers, like when they head off to college, land their first big job, get married, or have kids. With Zs delaying or skipping these traditional milestones altogether, it’s more important than ever to establish a connection through everyday values, behaviors, passion points, and contexts.

The good news is that Zs are proactive about financial literacy, and eager to cultivate their own financial well-being. Case in point: “Economic security” is one of the most important issues among Zs globally, according to our Culture Next research.¹ Zs are seeking financial guidance more than Millennials and doing so earlier. Specifically, they want transparent providers that speak their language and can support their individual financial journeys.

Many Zs also are taking action to shore up their finances, from saving more to avoiding big loans. What else are they doing? They're listening, not looking. When we identified the Financial Services and Insurance (FSI) customers among overall Gen Z respondents in our global Culture Next study, we discovered that this cohort uses audio in specific ways. Brands that want to reach these Zs should take note: Nearly 70% of Purchasers and Intenders in these categories stream music every day—that’s more than those who stream video, play video games, or watch live TV.¹ And more than a third say they have purchased a product they heard about while listening to a podcast or music on a streaming platform.¹

We spoke with Spotify’s Category Development Officer for Financial Services & Insurance, Liz Song, for more on how digital streaming audio can connect FSI brands with Gen Zs...

Q: What’s most important for FinServ and Insurance providers who want to reach Gen Zs?

“Trust is a huge factor for the financial industry at-large. In some ways, it can feel like providers are coming from behind the starting line with Zs, because this generation is pretty stressed about their finances and have a lower tolerance for what they deem to be unnecessarily complex financial language as well as clunky digital experiences. These are the areas where traditional banks can earn trust with Zs. Their challengers are in the opposite position: fintechs and neobanks are a lot hipper and offer easy-to-use mobile apps that are a must for digitally-native Gen Zs.

This notion leans into the current Gen Z banking trends we’re seeing, which shows that Zs tend to trust fintechs with their financial data more than traditional firms (66% vs 63%).² But even for these new competitors, trust isn’t an automatic win. Funding for fintechs has slowed after a record amount of investment last year, and not only are company valuations falling but they are also laying off employees. Smart Zs are starting to think, ‘Hmmm, maybe my money is safer at an old-school bank.’ In fact, 70% of Gen Z Financial Services and Insurance Purchasers say they’re more likely to trust a brand that’s been around for 50-plus years rather than five years—which is more than Zs overall.”¹

Q: What’s your advice for FinServ and Insurance brands who want to position themselves authentically, while staying true to the reality of their offerings?

“Financial service and insurance brands must get messaging and engagement right. It's not going to be about the product push, or even how their services fit into the lives of this young audience today. Instead, it's going to be: ‘How do you support Gen Z's ongoing financial journey and help them achieve their goals?’ And that’s likely to start with education and guidance, and evolve to products and services when they’re ready.

Whether you’re a traditional firm or a digital challenger, you have to be smart and credible first and foremost, because people expect you to be the authority on the topic of finance. They have to know they can rely on you. But there’s another factor that’s important too: personality. You have to be accessible, approachable—and even fun and cool—because you have to be the dependable expert that people want to get help from.

Spotify is where brands can be both smart and cool. They don’t have to pick just one and aren’t stuck with labels. In fact, Zs use audio to inform their ever-shifting identities and understand themselves better.”

Q: Finance and insurance aren’t necessarily the hot topics young people are most excited to talk about. When and where are the best times and places to connect with Zs?

“Brands have become much more creative and are taking control of financial conversations. Many banks, investment firms, and credit card companies have actually become podcast creators themselves. Some of them have more than 10 proprietary podcasts that feature their own experts—these are the research analysts and financial advisors who used to write 30-page white papers. Zs aren’t reading those, but they are getting information on social media from ‘finfluencers’—aka financial influencers—many of whom are not qualified to be providing financial guidance.³ Podcasts are a modern way for firms to deliver accurate high-quality content from true experts in a format that Zs welcome.

For more on how brands can connect with Gen Zs, check out the full Culture Next 2022 report.